One of the most effective ways for nonprofit organizations to improve efficiency and risk management is by integrating separate, but vital, technology tools such as their grant and financial management platforms.
Organizations that are, for instance, managing grants through tools such as Fluxx Grantmaker and financial reports through Sage Intacct can gain a number of benefits by using the integration toolkits both platforms offer.
Software integrations help foundations and grantmakers address a number of challenges that arise when program officers and the accounting team perform their respective responsibilities on different platforms. The most common challenge is the fact that without integration, data that is entered in one platform needs to be transferred manually to the other.
This process of exporting and importing data between systems takes time that could be spent more productively. In addition, entering data manually can lead to errors such as numbers being transposed, or the accidental entry (or omissions) of digits as figures are entered or uploaded.
Maintaining separate systems also creates a need for the accounting team to reconcile data generated by both systems to ensure the figures match.
In contrast, integrating your grant and financial management systems provides a number of benefits, starting with a better understanding of your organization’s commitments and cash flow needs.
As a grant is awarded, for instance, relevant data from your grantmaking tool such as the recipient’s details and the financial commitment is transferred automatically to the accounting system so the current payment can be scheduled. If a grant spans more than one year, it’s easy to anticipate future payments and to project the corresponding effects on cash flow and distribution percentage requirements.
This helps your management and board understand, at a glance, how much you have donated in a given period, as well as your funding commitments for the coming quarter and fiscal year. Your organization is able to make more accurate forecasts and is better prepared to meet its distribution goals and philanthropic responsibilities.
In addition, this data can be presented in a variety of reports and formats depending on the recipient’s role and preferences. People can view data in text reports, graphics, dashboards or customized combinations in whichever system they are most familiar.
And, because the data is propagated from one system to the other in real time, there’s no need for members of one team to contact their counterparts on the other side to check on the status of a grant award. Your organization’s financial staff can see the data in the system they work in instantly, and program officers can update beneficiaries about the status of a grant, such as whether a check has been scheduled or cut, without having to connect with the accounting team.
Another reason to integrate the two platforms is that it improves your controls framework and risk management strategies. The risk of data in the grant system being altered after it’s sent to the accounting system is greatly reduced because the data is synchronized in real time and involves no manual intervention. Similarly, the accounting system can automatically detect and reject funding requests that lack any required grantee information, reflect programs that have expired or lack the necessary approvals.
Integrating data on both platforms also provides an important single source of the truth because as the program officers and finance team access their respective applications, they can be assured they’re seeing current and reliable data and projections. Members of both teams can use the applications they are most familiar with, and trust that the distribution and grantee data they’re seeing is accurate.
Some organizations have resisted integrating their grant and financial management tools based on a misconception that doing so is a complicated effort. With a pre-built integration toolkit, it is a simple process.
The pre-built integration has already identified and mapped the most common fields used to transport data between systems. So all that is needed in terms of the implementation is to identify the additional data fields you want to match in both systems, and then the integration will handle the work of moving data from one platform to the other. (A typical integration using the pre-built toolkit takes 4-6 weeks to complete.)
This approach allows the same data to appear in both platforms, with each system serving its designed intent, enabling your program and financial teams to perform their functions more effectively and helping your organization to scale more efficiently.
If you have questions or want to learn more about integrating your systems, contact our Nonprofit team.
