Introduction:

When selecting enterprise-wide association management software, many organizations face the following dilemma: Should we install an accounting package written by the association management software provider or should we install a more widely-used package like Solomon, Great Plains, or Platinum? Associations professionals have very strong opinions on both sides of this issue, and in this discussion we will present some of the issues for your association to assess. 

In this discussion we refer to those accounting packages written by the association software vendors as "integrated" and those accounting packages written for the general public as "best-of-breed" (b-o-b). 

Best-of-Breed Packages:

Best-of-Breed (b-o-b) packages boast a wider feature set than integrated packages. Many of the accounting packages used by the general public and associations have a customer base in the tens of thousands. With this kind of customer base driving demands and bankrolling development, you would expect a richer and more robust feature set. 

Are these additional features critical to your association? Like a true consultant, I can only give one answer: It depends on your situation. For some associations, these features will prove critical—in others, frivolous bells and whistles. The only answer will come by doing a full needs assessment of your requirements and match those requirements with the features offered. 

With truly shrink-wrapped commercial-off-the-shelf (COTS) accounting packages, you can buy all kinds of modules for just about any accounting-related application that you may have. Such modules include the customary accounts payable, accounts receivable, general ledger, budgeting, report-writing, but also many more. Try for example, payroll, inventory, fixed assets, purchase order, credit card processing, electronic data interchange (EDI), automated clearing house (ACH or automatic check deposit), project cost accounting and grant management to name a few. Again by analyzing your needs with a critical eye toward improving your processes, these additional features may prove critical to your operation. 

Because of the widespread use of some of the accounting packages, third party add-ins like report writers will write interfaces to these accounting packages. Conversely, because of the wide customer base and large revenue stream of these COTS accounting packages, they can afford to write interfaces to such add-ins as well. When you see the capabilities of some of these products, like FRX, F9 and Crystal Report Writer, these add-ins may make the difference. 

Even though b-o-b accounting packages don’t automatically integrate with the association management software, all of the better-known association management packages offer interfaces into the general ledger. For example, most association management software provides accounts receivable modules, any transactions created by the accounts receivable system will interface directly into the general ledger. Refunds from returned purchases entered through order entry and canceled subscriptions will require updates into both the general ledger system and the accounts payables system (so that you can issue a check). 

B-o-b packages offer the additional advantage of third party integration. By this, I mean that many of these packages are sold and installed by value added resellers or integrators. This creates competition and (hopefully) improves the level of service offered to the client. This also protects clients from a degradation of services provided by the software manufacturer. 

Attracting accounting staff who have experience with a well-known software package will be easier to find than those specific to the association industry. After all you will draw from the general public rather than a subset of the association industry. 

Integrated Accounting Packages:

With all the advantages offered by the b-o-b packages, why would you want to buy an integrated package? Well there are some compelling reasons for the integrated packages too….

Integrated software packages offer a single database from which all applications, both accounting and association management, are driven. This provides the advantage of a shared contact database from which names, addresses and other contact information can be kept. 

With a single database you can use a single report-writing tool, rather easily, to combine information from all of your integrated applications. Examples of such reports could include a reconciliation between the membership module and the refunds paid due to membership cancellations. 

Integrated accounting packages may offer complete audit trails from the general ledger to their source modules including membership, and order entry. A single integrated system can integrate all transactions. Ledger entries for membership, subscriptions, and order entries are much more easily traced back to their source. 

If you pay your members or your other constituents, you can maintain this information in one place and both the accounts payable and constituent database will refer to that single entry. Some associations pay experts from within their constituency to assess or accredit their organizational constituency. An integrated system provides maintenance of the two systems from a single entry point. All of the b-o-b association providers claim that they can write automated procedures to integrate the two. Is this possible? Definitely. Problem is, there are very few associations who have fully integrated b-o-b accounting with their association management software. Those who have fully integrated b-o-b packages, that I know of, use the same database, for example Oracle, for both systems. On the other hand, one non-profit IS Director said, "we have 200 transactions per month, and if we have a couple of dozen duplicate entries, who cares?" In many associations, paying their constituents as vendors, just isn’t a big deal. 

When a constituent cancels a membership or returns an item ordered, all transactions may be automatically updated in the appropriate modules. One association pays constituent/experts to survey or accredit constituent organizations (at the expense of the constituent organization). When paying these experts, they wish to create a record in the accounts payable module and create a corresponding receivable in the accounts receivable module. This association would save many hours if a single entry in the payables module would also create a record in the accounts receivable module. A single database would make this much easier than two separate and distinct databases. 

Having a single database may also save you money in database licensing costs. If your association management software uses an Oracle database and your accounting package uses Microsoft SQL Server, then you will need to pay for licenses for both Oracle and SQL Server. 

Integrated software vendors, if they’re worth their salt, have written a standard user interface. This means that navigating through the system is completely standard in both the association management software and the accounting software. In a Windows environment, with simple point-and-click navigation, this advantage is somewhat diminished. With a single integrated database, you can hope that a single report writing tool will meet the entire organization’s needs. Such standardization will reduce the learning curve and training—additionally users from different departments can help each other. 

Having a single vendor provide software will help ensure that updates to accounting will remain compatible with former versions of the association management software. With b-o-b accounting and association management, you have no guarantee that future versions of one will remain compatible with the other. Such upgrades will either cost money or time or both. 

The integrated vendors will tell you that their accounting package, specifically meets the needs of not-for-profits better than any generic accounting package. Is this true? Only you can tell, with careful scrutiny of all the packages matched up against your needs assessment. 

What’s the Answer for Your Association?

One association’s recent review of products, both b-o-b and integrated, found that both kinds of packages provided sufficient controls, audit trails, and reporting. Their favorite accounting software package, a b-o-b accounting package, cost two to five times as much as the other b-o-b and integrated accounting packages. They selected four finalists, two b-o-b and two integrated. They now await additional information, pricing, and client references. 

Here are this consultants top ten tips for selecting association management software: 

1. Pick the overall solution that best meets your organization needs. 
2. Make sure that whatever your vendor tells you, whether integrated or b-o-b, that you check with their clients who already do what the vendor tells you they can do. Sales people love to answer yes, despite the limitations of their software. 
3. In this discussion, we have spoken generically about the different two genres of software, integrated and b-o-b. We discuss generally what should be advantages of the two genres. Some of the packages that you review may overcome many of the shortcomings of their genre—likely not all of them. 
4. Get all assurances of the capabilities that the vendor claims in writing. Again sales people love to answer yes, despite the limitations of their software. 
5. Just because another not-for-profit or many other not-for-profits like a certain package, doesn’t mean that it will work for you. 
6. Make sure the accounting package provide the controls, audit trails and reporting that your organization requires.
7. Watch for the advantages that we’ve discussed here, and see which applies to your organization. 
8. If you like the capabilities of add-in product like FRX, F9 and Crystal Reports, check to see which provider, both integrated and b-o-b, can support these tools. 
9. When selecting a b-o-b association management software, it is certainly easier to integrate with your accounting package if they both use the same database. If they both use Oracle or if they both use Microsoft SQL Server it will be easier to develop reports that utilize data from accounting and association management. Also writing reports using the same tool will be made easier. 
10. Try not to select a package simply because this is what key staff know. Use the software selection process as an opportunity to find the best fit, and possibly more importantly, to improve the processes of your organization. The average tenure of staff these days is around three years. If you select the right system, key staff will turn over two to three time, before its time to pick again.