So much goes into running a non-profit, especially one involved in food distribution. You must acquire donors, manage donations, maintain compliance, and stay on top of your logistics. Amidst all this, you must also strive to achieve financial transparency, especially if you want to keep your donors and acquire new ones.
That said, achieving financial transparency can be challenging if you don’t have the right tools. You will have a hard time understanding your organization’s financial health. This can prevent you from conducting the day-to-day operations of your NPO effectively. That’s where an Enterprise Resource Planning solution, or ERP, like GoldFinch, comes in. Its features can help you acquire better insight into your organization’s financials, helping you achieve financial transparency.
How Does an ERP Help an NPO Achieve Financial Transparency
Let’s take a look at some of the ways ERP can help you achieve financial transparency.
NPOs have many expenditures, and having a single platform that integrates all financial data, including expenses, grants, and donations, helps the administrators manage all financial transactions. You can track cash flow, revenues, and costs through an ERP, giving you real-time insights into your financial positions—and promoting timely and informed decision-making.
Budgeting is essential in any type of entity as it allows for the proper allocation of resources. One of the ways an ERP helps is by giving you insight into how much you’re spending. For instance, it can inform you how much you spent acquiring food and distributing it to various locations. Based on this information, an ERP can help project your expenses and make informed choices for the future. This also helps eliminate financial waste and directs more resources into helping the community.
Promotes Transparent Reporting
One thing with donors and stakeholders is that they often want to review your financial reports. They want to ensure the funds directed into an NPO are being used correctly. An ERP helps you create transparent, easy-to-read, and understandable financial statements. If a donor wants to see how you used the money they send, you can use an ERP to generate and submit accurate financial reports.
Better Resource Allocation
When running an NPO, you’ll discover that some groups need more help than others. For example, if you deal with food distribution to homeless shelters, you’ll see that particular shelters require more food than others.
You can use an ERP system to store data about various shelters where you’re distributing food. This way, you can identify areas where resources are needed more and adjust accordingly. With your ERP system, you can justify why one shelter needs more help than the other. This promotes financial transparency among the administrators and donors. In addition, you will avoid excess spending where it isn’t necessary.
It’s imperative to have accurate accounting reports. Even a tiny error of $1 can cause your books not to add up and make it look like you’re wasting company resources or being dishonest. An ERP helps improve financial accuracy and, in the process, promotes transparency in your NPO. How does it do this? By collecting all the organization’s financial data in a single platform.
This reduces the need to share and compile data from different departments, reducing the risk of human error. With accurate financial statements, it becomes easy to track every cent and prove to donors and other relevant stakeholders that funds are being used as they should.
Even though NPOs may be exempt from paying taxes, they must adhere to certain financial regulations. Failure to do so can lead to legal repercussions or damage to an organization’s reputation. ERP helps with compliance in various ways. One is automated reporting, where the tool generates financial reports designed to comply with regulatory requirements, reducing the risk of non-compliance.
In addition, an ERP system will keep track of all financial transactions, giving you a history of where money was used. Such transparency is essential when you’re trying to acquire donors or motivate those you have to donate more funds.
Management of Donors and Donations
One of the significant challenges NPOs face is keeping track of their donations and donors. This includes the donor’s giving history, how they prefer to donate, their reporting requirements, and fund utilization constraints. An ERP makes it easy to track all this while automating the donation process, allowing the NPO to reduce manual tasks, reducing the risk of error, and improving operations efficiency. In addition, with an ERP’s robust reporting capabilities, a non-profit can track its fundraising efforts and see if they are working.
Streamlining Operations with ERP Software to Improve Financial Transparency
Running a non-profit isn’t easy, considering your goal isn’t to make a profit but to impact society. To run an NPO, you must juggle multiple tasks like fundraising, program management, financial management, donor management, and compliance reporting. Doing all these functions manually can be overwhelming, preventing an NPO from achieving its vision and leading to mistakes that can risk the company’s financial health.
An ERP software like GoldFinch streamlines all these processes by automating important tasks. At the end of the day, all activities an NPO does are money-related. When most tasks are automated, it’s easy to see where funds go, increasing financial transparency in your NPO. With features like accounting, inventory management, reporting, and analytics, a food distribution NPO can track funds and ensure they’re used appropriately to provide accurate and detailed reporting.
How GoldFinch ERP Can Help
The world of NPOs requires managing multiple things at the same time. Luckily, GoldFinch ERP is here to save the day. It makes financial management easier for expense reporting, budget tracking, or forecasting cash flow. In return, you achieve financial transparency. Contact GoldFinch today and get started on a user-friendly ERP that will give you a holistic view of your NPO’s financial health, helping you serve the community better.