The Hidden Costs of Outdated Accounting Systems in Nonprofits

Nonprofits often operate on tight budgets, making every dollar count. Many organizations also continue to rely on outdated accounting systems like DOS or Excel that were not built to meet today’s needs, despite the availability of advanced software solutions. This decision, while seemingly cost-effective, can actually lead to significant inefficiencies and hidden costs.

Why It’s Time to Rethink Legacy Tools

Older systems, while familiar, are far from efficient, and often lack the automation, integrations, and real-time reporting capabilities required in today’s fast-moving environment.

The Human Hours Involved

The true cost of these outdated systems lies in the human hours required to operate them. We’ve seen nonprofits that heavily depended on Excel, which required hours of extensive manual data entry and reconciliation. Manual processes are time-consuming and prone to errors and rework. One of our nonprofit clients saved approximately 40 hours of work per month, after transitioning to a cloud-based ERP system. This time savings translates directly into cost savings, allowing the finance team to focus on more strategic tasks rather than mundane data entry.

 

Signs Your System Might Be Holding You Back

Consider an upgrade if you’re experiencing:

• Heavy manual data entry and reconciliation

• Limited visibility into financial performance

• Cumbersome reporting workflows at month-end

• Integration issues with donor, CRM, or payroll systems

• Difficulty supporting remote or hybrid teams

The Benefits of Automation

Investing in modern accounting software with automation capabilities can drastically reduce the time spent on routine tasks. Automated systems can handle tasks such as:

• Invoice processing

• Data reconciliation

• Financial reporting with minimal human intervention

  
  

Automation not only improves accuracy but also frees staff to focus on higher-value activities. With more reliable data, accounting teams, leadership, and board members can make decisions-with greater confidence and clarity.

Long-Term Savings and Growth

While the initial investment in new software may seem daunting, the long-term savings are substantial. By reducing the time spent on manual processes, nonprofits can allocate their resources more effectively. Additionally, modern systems often come with advanced features such as real-time analytics and reporting, which can provide valuable insights for strategic decision-making and organizational growth.

Nonprofits must consider the hidden costs of sticking with outdated accounting systems. By investing in modern software solutions, they can save time, reduce errors, and save money in the long run.

Thinking about what’s next for your accounting system?

At Kiwi Partners, we help nonprofits navigate this transition, ensuring they reap the full benefits of automation and advanced accounting technologies. Nonprofits we’ve supported report time savings, improved data accuracy, and better support for organizational growth. And with the right implementation partner, transitions can be smoother than you might expect. Whether you’re just exploring options or ready to make a change, we’re here to help. Contact us for a free consultation.

About the Author

Kate Koraia, MBA, CPA, Sr. Vice President of Consulting Services, has been part of the Kiwi Partners team since 2015. An experienced project manager, Kate's expertise extends to ERP system reviews, selections and implementations, along with staff training. Her work includes re-engineering financial systems, improving accounting processes, and implementing technology to enhance efficiency and reporting. Kate is a Certified Sage Intacct Accounting and Implementation Specialist, Certified Xero Partner, and Certified Blockchain Technology Analyst.