Types of Software Applications for your Nonprofit Accounting System

Nonprofit Accounting

On-Premises – This type of accounting software is considered “off-the-shelf” where you purchase the traditional box of software and install it on your computer(s) and it is run on the computer(s) hard drive or your own servers. This is still a common and viable option for some nonprofits. Many times there is a single purchase of software, and many companies charge for ongoing support and upgrades.read other article!

Hosted Solution – There is third party hosting providers that will run on maintaining the accounting software on at their remote data center. They will usually implement, help with training, and handle most upgrades and technical problems for you. Agencies no longer have to spend time and money on installing, repairing or upgrading, but will still spend on the hosting fees of the third party company.

Software as a Service (Saas) – Today, you hear a lot of people talking about “cloud computing.” Basically, this is the Software-as-a-Service model where the application is hosted by the vendor over the Internet. You don’t purchase the software directly, in most cases, and you don’t host the software (or have to worry about maintenance, repairs, or upgrades.) The nonprofit usually pays a fee per user, per month which prevents the large upfront investment like when purchasing the package. Depending on the accounting software, an agency may end paying more over several years with the SaaS model. The cloud computing software can be accessed from anywhere with an Internet connection.

Which model is right for your nonprofit organization? Software-as-a-Service seems to be the wave of the future, allowing agencies to have smaller upfront costs. And it is very convenient to be able to access it from just about any computer at any location. And it’s nice not to have to worry about dealing with software implementation and upgrades. There may be less of an opportunity for customization in the SaaS model and many fear security issues when it comes to having their information and data being hosted elsewhere. Others like the ability to completely customize an On-Premises version (although the more customization, the harder it is to upgrade.)

Nonprofit Accounting

The answer for which is best is going to depend on budgets, your ability to host, your need for customization, and whether you have an IT staff or expert on hand to help out. In other words, it depends on your agency. But you have choices you need to evaluate before making a nonprofit accounting software purchase.continue reading..