In 2023, advancements in technology continue to drive accounting trends for nonprofits, who are most interested in technology solutions that:
- propagate their mission impact
- build employee morale
- foster organizational resilience
- drive efficiency within and without the organization
To that effect, the ability to automate financial reporting is considered the most critical accounting goal for non-profits in 2023. In fact, non-profit finance leaders chose automation as the most desirable functionality with a 72% margin compared to other initiatives.
Why is automated financial reporting such a burning trend? It is the key to measuring real-time data fast and efficiently.
And this is just one example of how new technologies impact nonprofits. With immediate access to accurate data, you can track, measure, and share your mission outcome metrics, thus, increasing your chance of getting corporate donations by 82%.
Here are some of the other accounting trends to look out for in 2023.
Accelerated Automation Solutions
We are yet to tap into the full capabilities of automation technology solutions like machine learning and artificial intelligence leading experts to believe accounting and financial management process automation is bound to continue in organizations.
Financial leaders yearn for automated solutions to track and report inbound and outcome metrics, consolidate multiple entries, and control business purchasing and spending habits. The goal is to quickly compile and collect massive data that provides accurate financial insight.
Financial leaders can then leverage this knowledge to improve their mission impact results. For example, data shows 307 million people will use smartphones in 2022. In response, nonprofits can go mobile with their financial marketing strategies or storytelling initiatives to increase their reach toward potential donors. This, in turn, increases their revenue.
Adoption of Digital Media
Any business, regardless of industry, needs a strong internet presence to succeed in today’s market. This is no different for non-profit directors’ adoption of social media marketing to boost business performance.
Consider storytelling a significant part of enhancing your digital presence because it is key to motivating current and potential donors. And to take advantage of digital media in your storytelling strategies, embrace the growing trend of using videos and images.
When used correctly, videos and images create an emotional connection between your target audience and your intended message, making it much easier to persuade their resolve.
Use infographics in your written content, create and post creative video content, and organize regular live-streaming events for your audience.
Continued Use of Cloud Computing
Nonprofits can use cloud computing solutions in accounting because it helps to streamline processes, reduce costs, and improve collaboration. For instance, once the accounting software stores data on the remote server, it becomes easier for multiple users to access one file simultaneously.
This means that donors, accountants, or other relevant parties can access information that propels workflow freely. Additionally, cloud computing allows access to this information from multiple devices and any location with an internet connection.
This type of collaborative access makes it easier to streamline business processes. And since data storage is in the cloud, eliminating costly hardware and IT infrastructure reduces company expenses while increasing the cash flow needed for mission impact.
Another benefit of using cloud computing for non-profits accounting software is that it offers better security protocols than traditional on-premise systems, thus making sure that the organization’s sensitive data and revenue are protected.
Data Analytics in Non-profit Accounting
The use of data analytics will climb because it allows non-profits to understand their financial performance and provides information critical for decision-making processes. The breakdown of financial data into metrics like customer behavior, market trends, and emerging threats makes it easier to focus on aspects of accounting that enhance performance.
For instance, by analyzing fundraising data, nonprofits can quickly compound revenue, donations, and expenses. And by looking at factors like donor retention rates, program impact, and fundraising efficiency, the non-profit can tell areas that need improvement or are performing optimally.
In turn, making decisions that spearhead the nonprofit’s mission impact becomes an effortless process because the organization can fully understand the impact of its work.
Embracing Third-Party Partnerships
Partnerships are meaningful because they speed up buying and selling. For non-profit organizations, third-party transactions provide an added source of revenue, thus, giving financial sustainability.
For instance, non-profit organizations can partner with allies like catering companies, event planners, and other vendors to host fundraising events that attract new donors. It is also possible to use third-party transactions to sell non-profit products and services that generate income for the organization.
In some instances, nonprofits can outsource certain services to third-party entities to manage the financial risk of operations because the responsibility and obligation are shared or transferred. The key is to find third-party transactions that align with your mission impact.
Focusing On 2023
The bottom line is that technological solutions provide non-profits with the aptitude to handle processes or pain points that hinder organizational agility. And as we focus on 2023, solutions like automation, cloud computing, digital media, and data analytics are bound to be top of mind of accounting leaders in non-profit organizations.
What is the future of accounting in business?
Artificial intelligence is expected to be one of the most influential technological contributions to accounting for businesses because of its automation capabilities.
Are there other trends in accounting that we can expect in 2023?
Yes. Technologies like data security, digital transformation, and data analytics will shape the future of accounting in business.
Will the same trends affect accounting for non-profit organizations?
Absolutely. The only difference is that these solutions will be specialized to fit the needs of non-profit organizations.