Why Is GL Integration So Hard to Get Right?
General Ledger Integration with Salesforce, Part 4
Hello! My name is Alexandra. I am a Solution Engineer for Salesforce.org. Welcome to my blog series about GL integration!
In Part 3, we broke down key General Ledger concepts and processes, from recording debits and credits to preparing nonprofit financial statements.
SHINING A LIGHT ON GL INTEGRATION PAINS
When I was working with nonprofit customers on the finance and accounting side of technology, one of the biggest pain points I heard over and over was “our current accounting system doesn’t integrate with our CRM.” There is a perception in the nonprofit sector that GL integration is simply too hard.
But as we’ve already discussed, nonprofits, now more than ever, need to prioritize strong GL integration. So where’s the disconnect? This article will shed light on the common factors that can impede a seamless CRM-to-GL integration.
Knowing Me, Knowing You
If debits and credits are the “language of accounting,” the work of GL integration is to translate fundraising speak into accounting speak. Understandably, development folks don’t speak finance. For good reason — they’re busy pounding the pavement raising mission-critical dollars! We want our fundraisers out there cultivating donor relationships and pulling in the money. This often means, though, that they might not know how to set up a donation intake process in a way that makes it easy for finance to do the accounting.
That often leads to a case of one hand not knowing what the other hand is doing; where development is raising money and entering gifts into the CRM unaware that they are missing key attributes about the gift. Meanwhile finance expects detail; they need accurate GL reports they can rely on to prepare the financial statements on which executives and the board depend to make strategic business decisions.
Business Process Definition
Translating and sending information from one system to another can be tricky enough if not set up properly. Now imagine the complexity if we add a few other fundraising platforms to the mix. But that’s the reality for most fundraising nonprofits. You get money from a variety of sources, from checks in the mail to credit card donations made online, to event registrations via PayPal. Donations coming in from multiple sources adds complexity, and many nonprofits lack a consistent, centralized business process for recording it all to the GL.
Best practice is to set up your integration strategy to pull all gift and revenue transactions into Salesforce CRM first as your system of record. Then you are able to execute a clean, consistent, and reliable GL integration process. (Which is made even more efficient and dependable with the help of Salesforce Accounting Subledger — more on that in this article!)
Technology Systems Don’t Talk to Each Other
Which brings us to the next common challenge nonprofits face integrating to the GL. Often, development organizations do not have debits and credits generated in their CRM or fundraising tools. While it is not strictly necessary, it’s much easier for fundraising and finance to speak the same language when their technology systems do the translating for them.
Without a true subledger built into your CRM, your teams will have to do more manual and often duplicative work. Not only does that cost your organization valuable time that could be better spent on revenue-generating or strategic work, the human intervention factor increases the odds of making costly mistakes.
Making Changes
The risk for costly errors is especially high when it comes to making any downstream changes to your donation records. The need to make adjustments is common. A major donor promises to contribute one amount only to send a check for another. A donor never sends a payment check at all, failing to meet their promise to pay. As I discussed in Anatomy of the General Ledger, there are accounting functions like adjustment journals and write-offs that help an organization account for these changes. But when development and finance are using different systems, things can get messy. Take this scenario, for example:
Daphne the Development Director at Learning Empowerment works alongside George and Anna. Daphne has been closely tracking a fundraising campaign they recently launched to purchase 100 laptops for the new tutoring program. After George enters today’s batch of donations into the CRM, Daphne refreshes her campaign dashboard and sees that they’ve finally made their fundraising goal! So she lets Paul the Program Director know he can go ahead and purchase the laptops.
What Daphne, George and Paul don’t know is that there is not, in fact, enough money in the tutoring program fund yet to purchase the laptops. Why not? Well, payment checks for a handful of the pledges the development team won have not actually been received by accounting yet. But because LE’s CRM system and accounting systems don’t talk to each other well, the development and program staff didn’t have a complete picture of the funding when making the purchases. Paul overspends from the tutoring program fund and Anna has to scramble to find unrestricted funds somewhere in the budget to cover the overage.
Overspending is a worst case scenario. But very commonly, the GL integration disconnect does mean that there is a standing monthly meeting between development and accounting to painstakingly review that month’s gifts to reconcile missing (or erroneous) information. How cumbersome is that? Or, the accounting manager is investigating a mismatch and has questions for development staff that they can’t answer because the gift occurred weeks ago and they have forgotten all the details.
Summary
I have heard from countless customers who deal with these challenges on a regular basis. There’s got to be a better way. What if your standard GL integration process could actually be highly efficient, accurate, and scalable? If these pain points ring a bell, read on to the next article in the series!
