Why Using Spreadsheets for Nonprofit Financials Spell Danger

Why Using Spreadsheets for Nonprofit Financials Spell Danger - araize.com

Pitfalls of Spreadsheets for Nonprofit Financials

Why use spreadsheets?

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Lack of training

Higher probability of human error

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Complex reporting requirements

Major problems using spreadsheets for nonprofit financials

  • Spreadsheets contain a lot of formulas, that without proper training can lead to errors and costly mistakes.
  • Planning is critical to proper set up of financial statements in spreadsheets. You need to plan for growth and the possibility of changes in your account structure that will require constant changes in the report format.
  • Is there an honest mistake in the spreadsheet, or is it fraud? Since it is easy to change information, without an audit-trial, accountability that protects against fraud is impossible.
  • There can be many copies of the same report, with no clear indication of which is the ‘true’ financial report.

Benefits of using dedicated nonprofit accounting software

  • Financial Reports right out of the box. An accounting system designed for nonprofits will give you the ability to generate nonprofit specific financial reports directly from the application, with an audit trail that backs up the numbers in the report.
  • Data is reliable. Because the financial reports are generated directly from your accounting software, there is much higher confidence in the accuracy and reliability of the data. This eliminates the possibility of human error that can occur when transferring data to a spreadsheet.
  • Data is secure. Since there are no extra steps in creating the reports, there is a high level of security and confidence in the financial statements.

Bottom Line

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Joseph Scarano is the CEO of Araize, Inc., developers of cloud-based FastFund Online Nonprofit accounting, fundraising and payroll software solutions.

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Joseph Scarano

Joseph Scarano

Joseph Scarano is the CEO of Araize, Inc., developers of cloud-based FastFund Online Nonprofit accounting, fundraising and payroll software solutions.

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