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Nowhere is operational efficiency more important than in the charity sector, and finance teams are leading the way. I’d like to share with you the most common accounting automations that our not-for-profit customers are implementing today, and the economic and productivity advantages they’re beginning to see.

Our 2023 survey reveals that 82% of senior professionals spend a quarter of their time on labour-intensive data collection. For non-profits, the picture is more complex; multiple stakeholders need specific reports, SORP is time-consuming, and there is no room for error.

The good news is that advancements in AI, automation and analytics are rapidly changing the way finance teams work. These technologies are widely available and, put to good use, the ROI is high. Here are six of the best use cases we’ve seen in the not-for-profit sector:

Automating banking and bank reconciliation

• Connecting business cards to your accounting software is an easy win, automatically capturing purchases.
• Automating reconciliation is a game-changer; a simple digital process completes the job in minutes.
• Using a FX payments platform saves time and money too, because it finds the best rates.

Integrating the sales ledger with your CRM

• Integrating your CRM with your accounting software means income flows straight into the sales ledger as a single source of truth.
• You can also set up recurring invoices from your accounting system and confirm funds received to your CRM. This step could action automated Thank You letters to donors.

Purchase ledger and automated approvals

• Optical Character Recognition reads electronic documents and auto inputs invoice data.
• Your automated AP workflow alerts approvers when an invoice needs their attention.

Staff and volunteer expenses

• A mobile app that captures expenses or milage claims will also allow staff or volunteers to upload receipts.

Simplifying reporting

• A flexible coding structure will allow you to group items in a SORP-friendly way when it comes to tracking donations and funds or projects.
• If you have multiple entities, you’ll save a lot of time in Excel if you can produce an automated consolidation report from your accounting system.
• Using an OData connector when you distribute reports is a neat hack. When stakeholders want an updated report, they simply reopen the file and the connector refreshes the data.

Reducing errors and joining up data

• Automating manual keying is one way to attack the problem; automating reporting is another, however integrating applications is the ultimate fix. Integrations allow you to embed your accounting analysis structure across the whole organisation’s data.   
• Common integrations include linking accounting systems with CRMs like Salesforce to track major donations, or payment platforms like Stripe that are favoured for high-volume, low-value donations.

Looking again at our research, an overwhelming 96% of participants cited errors as a major cause of frustration. Few charities are able to produce an error-free report without intensive human scrutiny. These technologies tackle the nuisance of errors head-on.

How much each charity can gain from automation and AI depends on how widely they automate. Some processes may not be worth automating while others could bring huge advantages. It’s important to estimate the ROI on each project before you begin.

Preparing for the future

Whether you’re ready to go all-in or prefer to watch and wait, change is afoot. Here are a couple of things you can do now to get ready:

Move your infrastructure and apps into the cloud, because that’s where it’s all happening.

Get prepared for…

• Automation. What are our most labour-intensive processes?
• Integration. What applications could I join up to save time, reduce error and give me better analysis?  
• Insights. How should I organise, group and classify my data to give me the insights I need to make better decisions?

It feels like we’re on the edge of something big. Next generation automation, AI and analytics are changing the way we work in a really good way; paying us back with time for more strategic work, giving us valuable information, mending the flaws in our processes and shaping a better workplace for us all.

Darren Cran is AccountsIQ’s chief operating officer