John Tate reviews the latest developments in accounting software but doubts whether they will deliver the systems integration charities require.

A lot is going on in the accounting software market. In the last two months alone we have heard of new releases and updates from Exchequer, Infor, Microsoft Dynamics, QuickBooks, Sage and Xero – to name but a few.

So what opportunities do these new releases present, and should charity finance leaders consider upgrading or replacing their existing systems?

I started using ‘off-the-shelf’ accounting software back in 1987. I ran this alongside bespoke sales order processing and merchandising systems, point-of-sale applications and a CRM database. Spreadsheets were used to fill functional gaps in the products and create information for the board pack.

Integration problems

The accounting software did a great job but my biggest problem back then was to generate integrated management reporting across the business. Different systems ran on various hardware platforms, and some were outsourced. Applications did not talk to each other and held data in different formats.

Fast-forward to 2015 and these issues are still the biggest problem many charities face with their accounting systems. They still struggle to integrate their different applications and produce comprehensive, charity-wide reports.

So looking at the vendor announcements in the last few weeks, how might they address these issues? There is encouraging news including:

• Development of mobile devices to record and display information;
• Improved integration with third-party systems;
• Added functionality for the core products;
• Cloud solutions; and
• Better tools to analyse data.

Perhaps the biggest story relevant to charities comes from Sage which has announced a closer partnership with Salesforce, including the development of a new product using the Salesforce platform called Sage Life.

The new Sage product and partnership claims to offer small organisations the ability to connect their customer, accounting, payroll and finance data into one system and to access this from any device.

In the past, Sage’s most widely used product, Sage 50 Accounts, has been criticised for a lack of features required by many charities. Examples include no capacity for Sorp-style reporting and limited levels of analysis in the general ledger. Whether the new product will deliver the basic features the charity sector requires remains to be seen.

Sage has also been seen as slow to respond to user demand for new product features.

Salesforce has been attractive to the sector, in part because of its generous charity pricing model. However, it is not a regarded as a straightforward ‘out-of-the-box’ solution and the cost of implementation and ongoing support can be high.

Also Salesforce was not developed as a charity-specific product and there are gaps in its functionality for particular not-for-profit requirements, for example in the fundraising area.

Lively debate

There is a lively debate going on about whether the current crop of ‘best-of-breed’ solutions will be replaced eventually by a smaller number of integrated systems. This sounds very attractive, but each part of any integrated product must be fit for purpose.

If a system that delivers seamless, integrated reporting is your holy grail, don’t forget that much of this might be possible with the applications you already have in place.

To make this happen you are likely to need to review and improve your current business processes. You will probably also need to get a better technical understanding of how to link information between your different systems, including the use of application programme interfaces (APIs) and basic data import and export.

While you should definitely keep an eye on the new products coming onto the market, I’d encourage you not to delay in making the most of what you have already got.

John Tate is a business consultant, and a visiting lecturer at Cass Business School.