The Best Accounting Software for Nonprofit Organizations – Top 10 Reviewed for 2023

The best accounting software for nonprofit organizations should be simple and easy to use while offering the key accounting and financial reporting features you need, as well as enabling you to easily accept donations and manage fund restrictions and grant requirements.

There are many excellent nonprofit budget software solutions on the market – so many, in fact, that you might be overwhelmed by the different options. To help you narrow down your search and choose the provider that’s best for you, we’ve reviewed and compared the best accounting software for nonprofits in 2023 so you can make an informed decision.

Ranking the Best Budget Software for Nonprofits in 2023

Here’s our shortlist of the best accounting software for nonprofit organizations, summing up their key features and unique benefits:

1. FreshBooks — A robust, full-featured accounting solution for nonprofits with built-in time tracking and project management functionality.
2. Oracle NetSuite — A complex tool for large organizations, offering advanced automation, real-time financial reporting, program efficiency tracking, and constituent relationship management.
3. Zoho Accounting — The best option for international nonprofits, thanks to multi-currency support, a wide variety of payment options, and easy funds and expense tracking.
4. Sage — An easy way to manage multiple revenue streams, allocate budgets, set department- and location-based limits, and track expenses across different locations.
5. Bonsai — Excellent project collaboration tools with built-in time tracking, allowing stakeholders to see how far each project has progressed in real time.
6. QuickBooks — An easy-to-use accounting solution with advanced expense tracking and one-click financial reporting, so you’ll be able to demonstrate accountability to your donors.
7. Melio — The best free online payment solution for nonprofits that lets you pay your bills and receive donations via ACH Bank Transfer without any fees.
8. Xero — A solid accounting tool with free setup for accepting online donations, automated bank reconciliation, and advanced expense tracking.
9. Wave — Free accounting features with expense tracking and categorization, receipt scanning, and unlimited free bank connections.
10. Blackbaud — Fully customizable fund accounting software solution with built-in support for fundraising, transaction tracking, and financial reporting.

Why Do Nonprofits Need Accounting Software?

Though nonprofits don’t have a commercial cash flow, there are still many financial aspects to take care of. This includes everything from managing pay runs for your team and keeping financial records of grants and donations to meeting reporting requirements and organizing budgets for your projects.

General tools like Excel lack the scalability needed to track the finances of even small organizations.

Trying to manage accounts with spreadsheets will be time-consuming and tedious, requiring large amounts of manual data entry as well as the replication of information to different systems – and a constant potential for errors to slip in.

With the best financial software for nonprofits, it’s much easier to make smart, data-backed financial decisions, provide timely information to current and potential donors, and demonstrate accountability to all stakeholders.

Put simply, accounting software can help you keep track of every dollar, make it easier to accept donations, help you organize your expenses, and provide you with invaluable data you need to successfully execute projects.

How Do Nonprofits Prepare Financial Statements?

Nonprofits also have to generate a Statement of Financial Position, which details the net amount remaining for designated and non-designated purposes after covering all expenses.

The process of preparing financial statements for nonprofits commonly entails the following:

1. Statement of Activities — All the received funds and grants, alongside expenses, generated as a Profit & Loss/Income Statement
2. Statement of Changes in Net Assets — The net profit figure detailing the changes between the current and prior period for net asset balance
3. Statement of Financial Position — A balance sheet detailing the position of the nonprofit after covering all outstanding expenses
4. Statement of Functional Expenses — A detailed list of all expenses, categorized by functional area (such as employee paychecks, programs, office rent, and so on)
5. Statement of Cash Flow — A summary of the organization’s cash management

As you can see, preparing financial statements is a lot of work, especially since you need to make sure every penny is accounted for. That’s another reason why accounting software for nonprofits is a life-saver.

It minimizes the possibility of human error, provides you with all the relevant data you need, and saves your accountant or accounting firm a ton of valuable time.

The Best Nonprofit Bookkeeping Software for 2023 Reviewed

Here are in-depth reviews of the best accounting software solutions for nonprofits so you can see exactly what you can expect from different providers and how the software can help you meet your reporting requirements and demonstrate accountability:

1. FreshBooks — Robust, Full-Featured Accounting Solution for Nonprofits

FreshBooks is a full-featured software package, built to help nonprofits handle every financial aspect of their organization and save valuable time so you can focus on doing your remit and making an impact.

The platform has the ability to offer your donors plenty of quick, convenient, and secure online payment options. You’ll also be able to create customized invoices with your organization’s colors, logo, and slogan, automatically send personalized thank you emails, and set up recurring profiles for your most generous supporters.

An area where FreshBooks excels is in business expense tracking. It allows you to import financial statements directly from most financial institutions, automatically converts the information into detailed reports, and lets you show your stakeholders exactly what the money is used for.

FreshBooks also makes it super easy to manage your team and volunteers. You can invite employees, volunteers, and even contractors to your account, assign individual tasks to your team members, and track their time.

All they have to do is click to start the timer when they begin working, and you’ll have an accurate log of hours spent on each stage of the project.

You’ll also be able to easily share information, files, and updates with everyone working on the project, which helps ensure everyone’s on the same page and is working with the latest information.

Lastly, you can generate a wide array of financial reports with FreshBooks, including donations collected, expense reports, time entry details, accounts aging, and more.

2. Oracle NetSuite — Complex Tool For Large Organizations

Oracle NetSuite is built for enterprise-level organizations, but if you’re willing to invest the time and energy to learn it, it offers everything you need to streamline every financial aspect of running a nonprofit.

With Oracle NetSuite, all your financial systems are consolidated into one platform. You’ll have access to all the features you need, such as cash management, real-time financial reporting, payables and receivables, statistical accounting, and allocation schedules.

You can automate the bulk of your admin work, including purchase orders and vendor billing, saving you lots of valuable time when executing projects, ideal if you’re hosting events for targets, donors, and stakeholders.

What’s best, the platform features a comprehensive accounting framework that lets you manage diverse revenue streams for your nonprofit, including donations from various sources and grants, as well as to easily manage fund restrictions and grant requirements.

Oracle NetSuite also automates FASB reporting, letting you configure and automatically generate compliance reports for executive leadership, board members, auditors, and your accounting team or accounting firm.

Another feature you’ll love is Program Efficiency Tracking, which lets you leverage scorecards to monitor functional expenses, demonstrate commitment to funding programs and services, and keep track of metrics like fundraising efficiency, program efficiency, cash flow to total debt, and contributions ratio.

3. Zoho Accounting — Best Option for International Nonprofits, with Multi-Currency Support

Zoho Accounting is an online accounting software solution for nonprofits that provides you with a comprehensive view of your organization’s finances and all the projects you’re running.

With Zoho Accounting, managing your organization’s funds is a breeze. You’ll be able to easily categorize all your expenses into separate expense accounts, sort funds by type and subtype, and generate expense reports with one click to easily keep track of spending.

You’ll be able to generate financial reports with ease, maintain financial transparency, and show donors, board members, and other stakeholders what every single dollar has been invested into.

Zoho Accounting also excels in project tracking and management. You can create a separate card for each project, assign individual tasks, allocate budgets and associate expenses to specific projects, track time spent, and generate individual financial reports for as many projects as you’re currently engaged in.

The platform is a great option for nonprofits that accept donations from around the world, as it supports a wide variety of currencies and lets you offer plenty of online payment options to people who want to donate to your cause.

To top it all off, Zoho Accounting offers a 15% discount on all pricing plans to registered charities, trusts, and societies.

4. Sage — Easy Tool to Manage Multiple Revenue Streams, Allocate Budgets, and Track Expenses

Sage is another excellent cloud-based financial management and accounting software for nonprofits. It dramatically simplifies financial reporting for nonprofits and automates key financial processes, helping you become data-driven and leaving you with more time to focus on your mission.

In addition to standard accounting features, such as expense tracking and reporting, Sage offers a variety of nonprofit-specific features that will help you streamline your organization’s financial processes. These include everything from grant tracking and billing to revenue recognition and financial reporting.

If you opt for Sage, you’ll get convenient role-based dashboards where you can quickly see all the key metrics like fundraising expenses, program efficiency, administrative expenses, average donations, and more.

You’ll also have a detailed general ledger (GL) powered by artificial intelligence, so you can streamline your processes, track net income by location, and easily monitor net income and expenses across your entire organization.

Sage comes with built-in nonprofit revenue recognition, saving you valuable time, helping you stay compliant, eliminating human error, and ensuring you easily pass yearly audits.

 

In addition to configuring specific revenue recognition methods for every revenue stream, you’ll be able to track barriers, conditions, and progress on delivery, as well as centralize all revenue calculations in one app.

With Sage, you’ll also have full control over fund spending since you’ll be able to easily track budgets, apply limits to all departments and locations, compare and adjust budget allocation methods, and see every single expense using real-time dashboards.

Another reason to opt for Sage is that it offers custom solutions for niche-specific nonprofits, such as educational nonprofits, human services organizations, faith-based organizations, foundations, nonprofit healthcare orgs, and more.

5. Bonsai — Excellent Project Collaboration Tools With Built-in Time Tracking

Bonsai offers quite a few handy features that will help you handle your organization’s finances, as well as easily manage ongoing projects and execute them, though it isn’t specifically tailored to nonprofits.

One of Bonsai’s strong suits is invoicing, and you can leverage a variety of templates, customize it with your organization’s logo and colors, and set up recurring payments, automated reminders, and thank you emails for your most generous donors.

The app also lets you set up a wide variety of payment methods, including credit cards, ACH Bank Transfers, and online payment processing services like PayPal. Bonsai lets you offer more options for donors, ensures transaction security, and lets you keep track of funds from multiple sources.

That said, the option for managing fund restrictions and grant requirements is lacking, so you’ll have to manually track funds designated for a particular purpose and ensure you meet the grant requirements before applying.

An aspect where Bonsai truly shines is project management. It allows you to invite donors, stakeholders, vendors, volunteers, and everyone else working on a particular project or program to join the platform.

This makes it infinitely easier to manage project-related tasks, track expenses, provide project updates, and share information with everyone involved.

Bonsai also features a built-in time-tracking functionality, although it’s mostly geared toward tracking billable hours and invoicing clients. As a nonprofit, you can still utilize this to track the time required to complete different stages of your projects so you can plan future ones with more accuracy and confidence.

6. QuickBooks — Easy-to-Use Accounting Solution With Advanced Expense Tracking 

QuickBooks is one of the most widely used accounting solutions, and it offers a simple and easy-to-use cloud-based platform to help you handle all aspects of accounting, donations, and reporting for your nonprofit organization.

With QuickBooks, you’ll know exactly what every dollar was spent on, thanks to advanced expense sorting. You can categorize expenses by program/project or by fund and generate expense reports to show board members, stakeholders, and donors how the money was utilized.

Additionally, QuickBooks helps you stay on top of your budget with donor and grant management and automatic bank reconciliations. This is invaluable since you’ll always know what funds you have at your disposal, ensuring that you can stay within budget when executing programs and hosting events.

If you opt for the QuickBooks Enterprise version, you’ll even have the option to directly add all your donors and vendors to your account and easily manage them and share information, progress reports, and financial reports with them.

You’ll also be able to give permission-based access to up to 40 team members to your account, ensuring that everyone is on the same page and knows exactly what they should be working on to help successfully execute programs.

QuickBooks also makes accepting donations from all over the world a lot easier. It lets you sync your bank account with the platform and accept donations via credit card, debit card, direct bank transfer, cash, and check.

If you’re already using apps such as Fundly or DonorPerfect to keep track of your donations, you can also import transactions into QuickBooks to have all the data available to you in one place.

You can also read our comprehensive QuickBooks Online review to learn more.

7. Melio — Best Free Online Payments Solution for Nonprofits

Melio isn’t a full-fledged accounting software solution, but it does offer a key service for nonprofits — the ability to make and receive online payments with lower fees. The service is absolutely free if you’re paying your vendors using ACH Bank Transfer or receiving donations this way.

The best thing about Melio is that it offers you the much-needed flexibility to pay your vendors in the most convenient way for your nonprofit organization.

In addition to direct, no-fee bank transfers, you’ll also be able to pay using your business credit card, even with vendors who don’t accept credit card payments. Melio will take the money from your account and forward the payment to your vendor using the method they prefer, whether by check or bank transfer.

An added benefit of this is that your vendors will always get paid on time, but the money won’t leave your business bank account until the next billing cycle. You can also opt to split bills into multiple payments, and even utilize two or more payment methods to cover the full sum.

Melio also allows you to set up recurring payments for monthly services, so you’ll never have to worry about late fees again. You’ll also be able to delegate payment responsibilities while staying in control, thanks to customizable approval workflows for every type of transaction.

Still, the biggest drawback of Melio is that it doesn’t actually offer any accounting features, such as expense tracking and financial reporting.

This is remedied by the fact that it seamlessly syncs with Xero and QuickBooks, as well as the fact that it’s completely free if you rely solely on ACH Bank Transfer for paying your expenses and accepting donations.

8. Xero — Solid Accounting Tool With Free Setup for Taking Online Donations

Xero is another great option for nonprofits since it’s simple and easy to use, comes with all the key accounting and reporting features you’ll need, and offers a 25% discount for registered nonprofits and charities.

While Xero isn’t specifically designed for nonprofits, you can still utilize its accounting features to track expenses and monitor the funds you receive through donors and grants.

You’ll be able to track income and expenses for your organization, generate financial reports, share them with stakeholders, and use online payroll to pay all the employees in your organization. That said, you won’t be able to easily set fund restrictions or manage grant requirements, so you’ll have to do so manually.

As a nonprofit, you can also leverage the Xero bank connections features, which ensure that all expenses are automatically imported and securely stored on the platform, so you can easily keep track of all your expenses against funds.

You’ll also be able to track projects in Xero, organize the work of employees and volunteers, and keep track of costs related to each program, event, or initiative.

Most importantly, Xero also enables you to accept donations via credit and debit cards. You’ll be able to add a donation button directly to your website and set up payment services for free, so it will be much easier to collect donations from your charitable patrons.

9. Wave — Free Accounting Features With Simplified Expense Tracking

Wave is the best free accounting software for nonprofit organizations, giving you complete access to all accounting features on the free account.

With Wave, you’ll be able to track all your expenses, connect your Wave account with your organization’s bank accounts with no additional fees, and scan receipts with your phone to quickly import them to the platform.

After connecting all your credit cards and bank accounts, payments are automatically imported into Wave. You can even set up rules for expense categorization if you need to tie them to a particular program, project, or fund.

This not only helps you stay organized but also allows you to quickly generate financial reports and share them with your stakeholders.

That said, Wave is at the bottom of our list because the platform has a pay-per-use system in place for all online transactions, ranging from 1% for direct bank transfers to 3.4% + $0.60 per Amex transaction. In other words, it’s not really a viable option for accepting donations.

The payroll features and personalized bookkeeping and coaching services add up to nearly $200/month, which might be too steep for most small nonprofits.

10. Blackbaud — Fully Customizable Fund Accounting Solution With Built-in Support for Fundraising

Blackbaud is a software solution built specifically for fundraising, nonprofit financial management, and CSR (Corporate Social Responsibility). What makes Blackbaud unusual is the fact that it was purposely built to help you streamline and improve your fundraising efforts.

The platform is fully customizable to your needs and processes and allows you to maintain and cultivate relationships with donors, keep track of key fundraising metrics, identify the strengths and weaknesses of your fundraising activities, and attend interactive online sessions with peers to share best practices.

Blackbaud also dramatically facilitates tracking and reporting on transactions by net assets, ensuring FASB compliance. It also streamlines the management of unique financial report requirements, making it one of the best fund accounting software solutions for nonprofits.

Additionally, the platform makes it easy to maintain a clean account structure and lets you capture vital program, grant, and department information that’s unique to your nonprofit.

The best part about Blackbaud is the company’s vast experience and the ability to adapt their platform to various organization types so you can get a fully customized solution for nonprofits, education institutions, healthcare organizations, arts and culture organizations, foundations, and charities.

The Best Nonprofit Financial Software Compared

Here’s a quick side-by-side comparison of the best software for nonprofit accounting so you can see what the different solutions excel at, which apps they integrate with, and how big of an investment they would be, whether you’re looking for the best fund accounting software for nonprofits or financial management software for small charities:

Key Features to Look For When Choosing Nonprofit Accounting Software

When it comes to choosing the best accounting software for your nonprofit organization, there are quite a few things to pay attention to. Here’s a quick rundown of the key factors you should consider when comparing different providers:

• Nonprofit-specific features — Don’t just opt for a generic accounting software. Instead, look for financial software for nonprofits that offers specific features your organization will benefit from, such as fund restrictions, grant requirements management, expense categorization, program management, and financial reporting.
• Payment options — It’s always best to opt for software for nonprofit accounting that lets you pay your vendors in a variety of different ways and allows you to accept donations from all over the world. So, look for one that lets you set up multiple online payment options and supports credit and debit cards, direct bank transfers, and payments via online payment processing services.
• Integrations — If you’re already using third-party apps to track your programs and initiatives, share information with your stakeholders, and manage your employees and volunteers, it’s vital that they integrate with your chosen accounting software so you have access to all the valuable data in one place.
• Scalability — Pay close attention to the number of users you can add to your account on each pricing plan. As your nonprofit grows, you’ll likely need to add more users, vendors, donors, and possibly even volunteers to the platform, so it’s best to choose a solution that doesn’t enforce limits to the number of users or can be easily upscaled to a higher subscription tier.
• Cost — Keep in mind that accounting software will be an additional monthly expense for your nonprofit, so carefully assess your budget. When going over the pricing plans of different accounting tools, make sure you fully understand what’s included with each package so you don’t end up paying a lot more than you expected due to add-ons and fees.

Is there Reliable Free Accounting Software for Nonprofit Organizations?

There are a few free nonprofit accounting software solutions, and we’ve covered two of the best in this article — Melio and Wave. While these providers do offer free plans with access to a variety of accounting features, they still need to make money somehow, which is what you should watch out for.

Given this, we strongly recommend opting for a paid service that doesn’t apply extra fees and has no hidden charges. This way, you’ll know exactly how much money you have to set aside each month to cover the subscription.

Most providers offer free trials, so you won’t have to blindly commit, either — you’ll have anywhere from a week to an entire month to test them out and see which charity accounting software solution you like the best.

On top of that, some providers, like Zoho Accounting and Xero, offer special discounts for registered nonprofits, charities, and foundations, so you can get a premium solution for less than $10/month and have access to all the crucial features you need.

Best Nonprofit Accounting Software Guides and Resources

In addition to creating a guide to the best accounting software for nonprofits, we’ve also created resources for a range of other use cases, including:

• The best accounting software
• The best accounting software for small business
• The best self-employed accounting software
• The best construction accounting software
• The best home accounting software apps
• The best restaurant accounting software
• The best real estate accounting software
• The best law firm accounting software
• The best accounting software for the UK
• The best accounting software for small business in the UK
• A Complete Guide to FreshBooks

Conclusion – What’s the Best Software for Nonprofit Accounting in 2023?

After reviewing and comparing the 10 best software solutions for nonprofits, we’ve concluded that FreshBooks is overall the best nonprofit accounting software in 2023.

It’s intuitive and easy to use, lets you customize and automate donation invoices and thank you emails, and allows you to offer your donors plenty of payment options to choose from.

Moreover, FreshBooks tracks your every expense, helps you categorize them, and lets you easily convert the key data into detailed financial reports, saving you a ton of valuable time in the process.

Another key advantage of FreshBooks over other providers is that it helps manage employees, vendors, and contractors, assisting you in executing your programs and initiatives with greater efficiency.

Click the button below to start your 30-day FreshBooks free trial and see first-hand why it’s the best accounting software for nonprofits in 2023.

Financial Management Software for Nonprofits FAQs

Aleksandar Stevanovic

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Aleksandar Stevanovic

Alex is a Senior Software Content Writer at Techopedia. He focuses on creating reader-oriented comparison pages, reviews, research pieces, and editorials. With nearly a decade of experience, he’s written for numerous leading brands across various niches, such as The Tech Report, Bitcoincasinos.com, CEX.IO, Forbes, Business2Community, and many more. His expertise in cybersecurity has made him a popular authority on privacy tools such as VPNs, password managers, blockchain technology, cryptocurrencies, and antivirus software. You'll find Alex working on cars, playing guitar, and cooking fantastic food in his spare time. You can reach Alex on Twitter: @stevanovic_alex

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