3 Steps to Better Data Reconciliation Between Fundraising & Accounting

Relying on manual data entry can give the illusion that your organization’s “money in” and “money out” accurately reflect your overall expenses and fundraising results, but if you have more than one employee entering data or more than one method of entry, it’s likely that there are mistakes hidden in plain sight. Smart fundraising solutions – like a constituent relationship management system (CRM) that syncs with QuickBooks – can take care of this task for you, and with fewer errors!

That said, the simplest way to bridge the gap between your fundraising and accounting data is with integrated CRM accounting software. Rather than manually entering data twice, or spending extra time importing/exporting information from one system to another, look for fundraising software that integrates with a trusted accounting solution. Together, they can simplify and/or automate the data entry process to save resources and reduce errors, among many other nonprofit benefits.

Overcommunication isn’t usually a concern when it comes to financial management – the more information recorded, the better. To address the mystery behind mismatched numbers, it is essential to modify your reports to reflect what is happening in both your fundraising and accounting areas. This is easily done using an integrated solution that allows you to organize and summarize each transaction by nonprofit-specific details.

With an integrated accounting solution that allows nonprofit employees to document transaction details and add notes where necessary, the organization gains a full view of its finances in one place, without headaches or unanswered questions.

Example: Using QuickBooks Online, fundraisers can take advantage of what’s called class accounting – tracking transactions by fund, initiative, or any other meaningful segments – so that when it’s time to run reports, there’s a clear picture of each segment’s financial health. This information can then be used to set a budget goal for each class.

This process will improve communication between development and executive teams for better strategic planning, which brings us to the final step!

Clear and consistent communication is the backbone of data reconciliation best practices. Even the most advanced software can’t compensate for a lack of effective communication. That’s why establishing clear-cut standards, like cutoff dates and standard recording methods, is an essential part of both teams being on the same page.

By fostering effective communication through integrated fundraising and accounting, nonprofits can minimize misunderstandings, maintain accurate records, and ensure a cohesive reconciliation process.

Example: For instance, if a Development Director receives a conditional gift from a corporation, they will record it, even if the condition has not been met. However, as a general accounting rule, this amount will not be reflected in accounting records until the condition is fulfilled. Without communication on how to handle such conditional gifts, the numbers are likely to diverge, leading to unexplained discrepancies in the report’s notes column.