You’ve been grant shopping for some time now, but are you prepared for what’s next once you start to receive them? Many grants come with significant—and detailed—compliance requirements. To meet those requirements, you’ll need to be able to successfully track and manage your grants and effectively report on how you allocated these funds.

If you are a grant-funded organization, it will be important to manage spending restrictions and meet reporting requirements. You will want to think ahead about being able to easily capture grant information, set up tasks and deadlines, and then run accurate reports at any time.

Fund accounting systems with grant management can help you from beginning to end if you are a grant-funded organization—or want to be. Here are three ways that your fund accounting system can support your grant management needs.

1. Tracking: Cut Out the Spreadsheets!

The more manual data entry you do, the more errors can creep into your accounting system. So how can you minimize these errors and create data entry policies for your users? If you guessed not relying on Excel spreadsheets to manage your grants, you are correct!

With a fund accounting software system designed for nonprofits, you can fully track all your grants, especially restricted grants, in one place.

It is essential to track your grant restrictions properly because they are determined by the funder. If you can’t show that you spent the money as requested, you probably don’t have a shot at additional grants from this funder—or they may withhold a final payment depending on where you are in the grant cycle.

If you are managing your grants in Excel, how can you guarantee your spreadsheet has been updated and the restrictions were followed accurately? Can you say with confidence you know where your grant spreadsheets are being saved and who has access to them? What if a donor or stakeholder wants quick information on a grant?

Managing your grants within your fund accounting system will allow you to budget by grant, report on budget vs actuals, and review grant activity, so you can quickly and easily answer these questions.

2. Think Ahead with Reporting Capabilities

How are you currently reporting on your grants? Or, if you are just now starting your journey to grant funding, how do you plan to report on how you used the grant funds?

No matter your mission, grant reporting will help drive success by ensuring compliance and accurately reporting on these awards. Fund accounting software can allow you to accurately curate grant reports to track restrictions, set budgets, and audit grant awards. These capabilities are crucial for keeping financials up to date and adhering to compliance requirements.

Imagine you had reports built to show you a snapshot of your grant awards at any moment? Better yet, these reports were set up on a schedule to run automatically. You can even format the reports to meet the funder’s specific requirements, so you aren’t reformatting them for each update.

There are endless possibilities as you scale your grant awards. You can view past grant records and activity, report on grant budget vs actuals or build grant specific reports to show stakeholders or the community where these awards have made the most impact.

3. Understand Your Indirect Costs

Tracking and allocating your indirect costs is one of the most tedious aspects of grant applications and reporting. Some grants may come with lots of stipulations about what operating costs they will fund—and how much. Having a fund accounting solution built for nonprofits will allow you to document these grant spending rules to help you later calculate reimbursements.

Manually entering grant information on spreadsheets can only go so far. This is where tracking indirect costs directly on a grant record will guarantee you are accurately calculating reimbursements and staying on top of billing. Indirect costs are not always readily identified with a grant, so being able to track them within detailed grant records will allow you and your team to be more efficient than a spreadsheet. Spreadsheets open your data to the opportunity for human error with tracking and calculations. Tracking your indirect costs in a fund accounting system can make what can be a tedious and frustrating process more streamlined and easier to audit. 

Ready to tackle the tasks of grants?

It’s easy to push grant applications to the back burner when you aren’t confident about meeting the requirements post-award. Managing them can be a daunting task. But let your fund accounting system make the process of managing grants easier. It’s important to invest in a solution that will support your mission fully and allow you to track and manage grant awards easily and accurately.

The best way to drive success towards your mission is to be able to track your funding—including grant awards, report on them accurately, and manage the complex situations that come your way. A spreadsheet can only get your organization so far and hinders your ability to accept more complex gift awards. You need a solution that will support restricted grants, complex reimbursement with indirect costs, and drive a successful audit.

To learn more about how a fund accounting system like Blackbaud Financial Edge NXT can save you time and headache when managing your grants, check out this on-demand webinar, “Financial Edge NXT: Spotlight Series: General Ledger Projects and Grants.”

The post Why Fund Accounting Software Beats Spreadsheets for Nonprofit Grant Reporting and Compliance first appeared on The ENGAGE Blog.