In the heart of effective charity management lies astute financial stewardship.
Charities both large and small have their own unique problems, from managing donors to allocating funds. In supporting these organisations, Xero is a cloud accounting software that thrives on being effective and simple. In this article, we will explore why Xero is the perfect fit for charities and explore some of the benefits for non-profit organisations.
Ease of Use and Accessibility
One of Xero’s greatest features, according to many, is its easy-to-understand user interface. Charities, often made up of volunteers and staff with different accounting backgrounds, find Xero’s intuitive design invaluable. As a cloud-based software, it can be accessed from almost anywhere, meaning that financial management needs to be at the forefront of your handheld device – which is vital in a mobile-first world.
Integration with Fundraising Platforms and Charity CRM
Xero’s ability to work with many fundraising platforms and Charity Customer Relationship Management (CRM) systems also means things like financial data can be passed back and forth seamlessly, making it easier to ensure that donations and expenditure is tracked properly.
Cost-Effectiveness for Non-Profits
For not-for-profits, cash is always an issue, so the fact that Xero has a number of different pricing models means that businesses are not sacrificing functionality for cost. This is important for charities as they have to stretch every pound.
Customisation for Non-Profit Accounting
Xero knows that non-profit accounting is not one-size-fits-all, and that’s why its accounting software can be customised to suit any charity’s needs, whether it’s tracking donations, managing grants or maintaining fund accounts.
Real-Time Financial Reporting
Being able to use live financials to get an instant update on how the charity is faring is a big advantage in today’s ‘data-driven’ decision-making world.
Collaboration and Role-Based Access
Xero allows users to permit different levels of access to the financials – from board members to accountants – offering the opportunity for collaboration and providing an inclusive and transparent financial management process.
Compliance and Security
No charity can afford to not comply with financial regulations and data security needs to be taken seriously. Xero’s commitment to security and financial regulations ensures that charities’ financial information is secure and compliant.
Supporting Case Studies
Xero’s effectiveness is also demonstrated by the large number of case studies, in which charities that have used Xero say that it has made them more efficient, more accurate, and better at looking after their finances.
Eco-friendly Accounting
As part of the growing environmental consciousness, Xero offers eco-friendly accounting options. Its paperless functioning is consistent with many charities’ environmental ethos, which promotes sustainability by cutting down on paper waste.
Training and Resources
Xero also provides a library of online training and support resources to help charities maximise the value of the software, even if they have little or no previous accounting experience.
Future-Proofing
Thanks to the spirit of innovation, charities that use Xero will always be using the latest in financial management technology.
Streamlining Gift Aid Claims
For UK charities in particular, the management and claiming of Gift Aid is a necessary evil, a time-consuming labyrinth that the small but dedicated staffers must navigate, when they would much rather be out fundraising. With Xero for charities, they can indeed do that, easily claiming the 25 per cent Gift Aid on donations that are eligible, boosting the charity’s bottom line.
Gift Aid is critical for charities in the United Kingdom and it is essential to have a good system for managing it. Xero’s handling of Gift Aid is a real plus point in its suitability for charities. This is an in-depth description of how Xero helps charities with Gift Aid:
Understanding Gift Aid
Gift Aid, a scheme whereby UK taxpayers’ donations to charities are effectively worth 25 per cent more, at no extra cost to the donor, offers an opportunity for charities to add to the value of donations they receive. But Gift Aid claims are administratively cumbersome, requiring careful record-keeping and compliance with HM Revenue and Customs (HMRC) regulations.
Using Xero’s accounting features and integrations, the complexities of Gift Aid are easily managed.
Accurate Record-Keeping:
Xero lets you specifically follow each Gift Aid-eligible donation, including the full details of the donor, the amount and date of the donation – all of which is necessary to make a Gift Aid claim.
Integration with Donation Platforms:
Most of the popular donation platforms used by charities integrate with Xero (my favourite is Donorfy), so it’s possible for an organisation to import Gift Aid declarations from the donation platform into Xero, thereby reducing the need for manual data entry and data errors in the first place.
Automated Gift Aid Reporting:
Xero can produce the reports needed to make Gift Aid claims. Charities can produce reports itemising all eligible donations received during a specified period, which greatly simplifies the process of claiming Gift Aid from HMRC.
Compliance Assurance:
With Xero, charities can make sure that they remain compliant with HMRC rules on Gift Aid, such as keeping proper records and being able to provide the necessary paperwork for an audit. These features are updated in real-time, which means that, should the legislation around Gift Aid change, Xero will have implemented the change and there will be no need for charities to do it themselves.
Streamlining the Claim Process:
Using Xero will allow charities to manage their Gift Aid claim more efficiently. The way the software manages information and presents it to the user saves time and effort in preparing and submitting the claim to HMRC.
Enhancing Financial Health:
Managing Gift Aid effectively can have a large impact on the health of a charity. By optimising the amount claimed through Xero, that’s more money for the charity without having to carry out any additional fundraising.
Xero’s Gift Aid capabilities demonstrate that it will be a great fit for lots of charities if they adopt it. By automating and making it simpler to claim Gift Aid, Xero saves charities time and labour while they maximise the financial benefit to themselves of Gift Aid. The fact that Gift Aid processing is part of Xero’s wider accounting functionality makes Xero an indispensable tool for any charity wanting to maximise the time it spends on its core mission.
To conclude I would like to state that Xero is more than just an accounting software but a total solution, well customised to the sector that is the charity. With its ease of use, integration capabilities, cheapness and customisation prospect it is a perfect tool for the charities who are aiming to be as financially effective and transparent as possible.
For charities seeking to minimise the costs of financial administration, Xero is the obvious choice.
