Believe it or not, Finance hates your Association CRM – sometimes as much as your membership management team. Well, maybe hate is a bit strong, but frustrated would definitely apply to most of the Associations I have worked with in the past.
I regularly help Not for Profits select Association CRM systems. As part of the process, I do a current state review to understand the pain points of the existing system. It’s a rare project where the finance team doesn’t raise as many concerns as other parts of the organisation.
Why Finance hates your Association CRM
If the finance staff hates the Association CRM, the reasons primarily concern the amount of manual processes it creates for them. This might happen for several reasons, including:
- The CRM is not integrated with the Finance system. When the two systems are not integrated, transactions must be manually reconciled in the finance system against the bank statements. That isn’t easy when the finance team can only see a bulk deposit from a payment gateway. What was the money for? Who paid for it?
- The integration between the CRM and Finance system integration is broken. I’ve seen a few Associations where they did have an integration between the two systems, but there was a data integrity issue. This means that the CRM report for financial transactions like membership renewals or events did not match the information going into the Finance system. It can take the finance staff hours to days to analyse and correct the problem each month.
- The CRM sends transactions to the Finance system on a “cash basis” when accounting is on an “accrual basis.” Accrual basis means that revenue is not recognised until it is earned. So, for Associations that use anniversary date renewals and/or host many events, this requires the finance staff to keep spreadsheets outside the system so that they can correct or add journal entries every month for this “deferred income.”
- The CRM cannot distinguish between products and services requiring GST and those not. This happens often with education classes that don’t incur GST. This impacts BAS statements and involves a lot of work each month to fix.
- The Association CRM cannot handle credits for events, resulting in manual refunds that may cross financial quarters. This may also impact BAS reporting.
Furthermore, don’t get Finance started about the issues related to invoicing, foreign transactions, multiple currencies, partial payments and GL code alignment.
Unfortunately, Associations sometimes leave their finance staff out of the evaluation committee for a new CRM, not realising how much the system impacts their jobs. So, ensure you include at least one of them on the selection team to consider their needs.
Otherwise, you might find out later that Finance hates your Association CRM – the new one you just purchased, too!
I regularly help Not for Profits select a CRM. Let me know if you need some help.
P.S. If you found this article helpful, you might want to read this one too:
Tammy Ven Dange is a former charity CEO, Association President, Not for Profit Board Member and IT Executive. Today she helps NFPs with strategic IT decisions, especially around investments.