Forbes voted Microsoft Dynamics 365 Business Central as a top ERP solution for medium to large organizations in 2023 and 2024. Premier Analytics has carried out multiple rollouts of Microsoft Dynamics across multiple industry sectors and is considered a specialist in N GO/Not-for-profit accounting systems. Most NGOs deploy Business Central and utilize the dimensions structures plus additional customizations, thanks to BC being easy to extend. However, several key areas may not be easily achieved without lots of development work in Business Central for NGOs/Not-for-profit.
Some of these key areas include:
Grant Management capabilities
NGO software requires an inbuilt functionality to record incoming grants and where required, functionality to create subgrants i.e. grants to local partner organizations.
Why this matters for NGOs: Handling grants effectively ensures compliance with donor requirements, especially transparency.
Multi-Currency and Multi-Locale Support
Most NGOs frequently operate across borders, receiving donations and disbursing funds in multiple currencies. For example, a grant awarded to Tanzania may be managed in TZS for local disbursement and expenses while the funder may wish to continue receiving their reports in GBP or EUR which may not necessarily be the local entity’s reporting currency.
Why NGOs need more: An NGO purpose-built ERP can handle currency conversions, regulatory compliance and reporting without additional customizations and with the tools for localizing tax and compliance rules in different regions.
Fund Accounting
The ideal NGO ERP would have fund and inter-fund transactions capability where the Fund balances all transactions. (rewrite this part)
The NGO Perspective: Fund Accounting is critical for NGOs to track how donor funds are allocated and spent. Fund accounting tools in NGO-specific systems have Inter-fund transaction capabilities and automatic fund balancing to meet all donor restrictions.
Transaction classification and Reporting
Non-governmental organizations (NGOs) need detailed classifications and reporting capabilities to comply with donor regulations. In our experience, we have worked with organizations that utilized up to ten different reporting codes for specific expense transactions. By having an expanded classification capability, NGOs can maintain a more streamlined chart of accounts. In the standard version of Business Central, only the Chart of Accounts codes and two global dimensions (classification codes) are available. While additional shortcut dimensions exist, their functionality is limited.
How NGOs benefit from Expanded Reporting Needs: Expanded reporting dimensions reduce complexity allowing leaner charts of accounts and easier accounting.
Extended Budgeting and Commitments management
NGOs work with tight budgets where all expenses must be justified. They must not only capture actual expenses but have available amounts calculated by expense line i.e. Budget – Commitments – Actuals = Available to Spend.
Ideal NGO solution: custom development is often required to enable such granular budgeting functionality. An ideal NGO solution is a system with built-in tools for budgeting, commitments, and available-to-spend tracking.
Fund Balancing
Fund balancing ensures NGOs can track resources according to donor-imposed restrictions. This involves:
- Automatic “due to/due from” transactions between funds.
- Generating financial position statements for each fund.
An Ideal NGO solution: Does not require significant configuration to achieve these functions and complies fully with the FASB116/117 Donor restrictions and IPSAS standards.
Multilevel Budget Tracking and Reporting
Most NGOs manage budgets at multiple levels – grants, subgrants, projects, and awards. An NGO-centric ERP should allow:
- Budgeting at any organizationally defined dimension.
- Reporting on actuals vs. budgets across multiple levels.
Solution for NGOs: Specialized systems have multi-level tracking readily available and simplifies processes with native support for complex budget hierarchies.
Workflow Approvals and Business Rules
NGOs rely on workflows to enforce approval processes and maintain compliance
An Ideal NGO Solution: An NGO ERP has tailored workflows that limit visibility to certain users, and enforce budget caps to prevent overspending and approval before posting transactions.
Why customization matters: Tailored workflows reduce errors and improve accountability in NGO operations.
Donor and Volunteer Management
Building relationships with donors and volunteers is vital for NGOs. An NGO specific ERP natively supports:
- Managing donor interactions and tracking contributions.
- Tracking volunteer hours, skillsets, and deployments.
The advantage of NGO-focused ERPs: These systems include built-in donor and volunteer management features, reducing the need for third-party tools.
Integration with Nonprofit Tools
NGOs often rely on specialized tools for fundraising, donor management, and reporting. Examples include platforms like JustGiving or Blackbaud.
Why NGOs need tailored ERPs: Seamless integration with nonprofit tools ensures smoother operations and better data accuracy.
Conclusion
From high implementation costs to limited non-profit-specific features, there are numerous reasons why NGOs might want to explore alternatives. Premier Analytics caters to NGOs that are ready to explore alternatives and we walk you through choosing the right ERP that caters to your organization’s needs.
Premier Analytics is a Microsoft Solutions Partner for Business Applications based in Nairobi, Kenya. We work with customers in Kenya, Uganda, Ethiopia ,Rwanda Tanzania , Zambia, Zimbabwe, Malawi ,Namibia to automate their financial accounting and operations with our ERP and Analytics software solutions. Our team consists of specialists in Microsoft Dynamics Business Central , Power BI and bring tons of experience in ERP implementations across Manufacturing ,Non-Profit ,Agriculture and other industries.
