Tuesday, May 7, 2013

Open Source NPO Accounting

The Software Freedom Conservancy has announced a campaign to fund the development of the first free and open non-profit accounting software.  Given the state of open source software for nonprofits (see below), this is something I strongly support.  It also touches the PostgreSQL community since our own NPOs/NGOs (Non-Profit/Non-Goverment Organizations) lack software for accounting.

For those who don't do accounting or accounting software, you might look at the wealth of ERP packages like LedgerSMB, OpenERP, xTuple, Adempiere, etc. and think we're well-covered.  However, ERP packages only really work for "goods" businesses, which sell packaged products to consumers or to other businesses.   The entire orientation of an ERP is around cost accounting for the cost of goods, and fulfilling numerous orders for a relatively fixed list of customers.  This doesn't work well for NPOs, who receive a large number of variable donations with no cost basis from a fluid body of donors. So while it's possible that an ERP system could be adapted to non-profit accounting, it would be a substantial and difficult adaptation, probably requiring forking the parent project.

Currently, 100% of the mature software for doing non-profit accounting is proprietary.  Most of this software is also quite expensive, outdated, and limiting, taking a lot of time and money  away from charitable organizations who desperately need more of both.  Premier NPO package Raiser's Edge, for example, generally costs non-profits as much as the salary of three staff; I know one museum who had to lay off so many people to afford it that they had nobody to enter data into the computer!  NPOs have no alternative, though; while they can go without software for a lot of things, accounting isn't one of them.

Among the NPOs which lack good software to track donations, donors, expenses, funds and tax reports are our own PostgreSQL non-profits.  Chief among these is Software in the Public Interest, which, as a "fiscal sponsor" of dozens of open source projects, needs much more sophisticated financial software than our smaller funds.

Of course, I'm also hoping that we end up with a PostgreSQL-based solution.  But at this point I'll take anything which gets the job done and is open and free.  The need is that bad.

Anyway, that's why I'm supporting the Conservancy Campaign for NPO software.  You could, too.




3 comments:

  1. The biggest problem with all accounting software is they make a lot of assumptions on how you run your business, they are adapter for "normal" companies, where most of the indata goes into the "create new invoice" form where they have lots of fields which are used as "dimensions" in all the reports you can generate.

    Our company, Trustly, deals with payment processing, and we never send any invoices, so all the accounting systems we looked at were completely useless as you couldn't enter the input data with sufficient fields/dimensions without also creating an invoice, which we never have to do as our clients hold funds with us.

    The only system with support for this kind of abnormal business we NetSuite. It's a webservice, and unfortunately slow as a dog. A simple bookkeeping entry via the API can take several seconds. It sucks. But it was the only one flexible enough.

    The core of our payment system is a bookkeeping system which we built inside the database using SPs. Unfortunately it doesn't do any of the "normal" bookkeeping like salaries etc.

    I think we could contribute with the core bookkeeping engine in our system to this project. It's been working flawless in our system and processed millions of transaction, and is a general purpose bookkeeping system, well suited to be used as the core component in a fully featured accounting system. I'll check with the others and see if they're up to open sourcing it.

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  2. Josh, we have built something of this nature on OpenERP (custom modules), perhaps could be slightly tweaked and would work nicely for what you need as well.
    Please please get in touch for a demo.
    Email: vadim@enapps.co.uk
    Tel: +44 020 8090 9222
    Vadim Chobanu

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  3. Accounting is hard business.Just open source it were good idea,but hiring programmer without proper financial knowledge is still useless. Lot of people build semi financial system like invoice only,billing only..and crm only.. Building a complete financial system way to complicated to imagine. To be truth,i want a real double entry system .Real accountant want their figure not hidden. It's ability to create,cancel,reverse the figure if anything happen.The most hard is report. We destroying accounting system by build odd and odd chart of account.Deal with it,this is the main problem of accounting system.Chart Of Account number.

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