Many organizations such as nonprofits, non-governmental agencies, K-12 school districts, state, and local government agencies depend on grants to fund some of, or in many cases, their entire operations. In the United States alone there are over 1.5 million nonprofit organizations[1].
Winning grants can be difficult, especially for competitive programs, so managing the grants that your organization receives is critical to making grants successful and to paving the way for additional grants in the future. Grants nearly always come with compliance requirements such as post-award reporting and spending guidelines.
A surprising number of organizations track grants in spreadsheets and use email as their principal means of sharing information and automating workflows. This increases the risk of poor data integrity and usually requires monthly spreadsheet updates and distribution to decision-makers.
Organizations that receive grants should use a financial solution, such as Serenic Navigator, that includes fund accounting to manage and streamline grant management processes. Fund accounting involves allocating money across categories called funds before the money is spent so that business rules governing the grant may be enforced. For example, grants typically specify budget categories and grant payments may be tied to milestones associated with completing objectives associated with the grant.
Fund accounting separates all financial accounts into categories and tracks the money throughout the grant lifecycle. The first stage is to establish funding sources. Grant programs may draw from multiple funding sources. The funding source determines compliance requirements and drives later grant reporting. In other words, the same program may need to comply with different rules for different funds depending on the funding stream.
Using grant management software, as part of a comprehensive cloud ERP solution, grantees can:
- Improve decision making
Users enjoy access to real-time information such as expenses, sub-awards, obligations; all presented in easy-to-understand displays. Dashboards show graphs and visualizations of awards and spending. Each role or even individual users can have their own reports and dashboards.
- Increase efficiency
Productivity goes up compared to maintaining separate information “silos”; everyone has access to the same information, reducing “back and forth” communications that waste time.
- Streamline processes
Get a comprehensive picture, from start to finish, of your entire process and eliminate redundant and potentially conflicting data issues. The implementation process can identify bottlenecks and establish a consensus on ways to improve business processes.
- Automate and simplify grant compliance with funder restrictions
Improve grant management by linking all relevant financial activity to a particular segment. Once business rules are automated you can trust that compliance will improve and spend less time on periodic reconciliation.
- Access data in the format you need
Most modern accounting software, as part of an ERP solution, allows exports to Excel, PDF, and other formats.
- Provide user-defined multi-currency viewing
You may need to view and report grant data in different currencies, depending on your multi-national operational needs. This feature is particularly helpful for multi-national humanitarian organizations conducting operations worldwide. Transactions are tracked in local currencies and converted to dollars or another currency for aggregation and reporting to the Funding Source and for the organization’s consolidated reporting.
- Increase flexibility
Choose to incrementally vs. fully obligate funding, recognize revenue based on milestone completion or invoice generation, and define indirect cost allocation methods at both the funding source level and the award level.
Most accounting software lacks features designed with grant management in mind, so consider using a product such as Serenic Navigator which is designed specifically for nonprofits, international NGOs, K-12 school districts and public sector organizations.
[1] Fund Accounting: A Must for Nonprofits from https://www.fool.com/the-blueprint/fund-accounting/
Note: An earlier version of this was posted on www.serenic.com