You know you need accounting software. Now which one? This lecture compares the main options used by nonprofits, breaks down features and costs, and helps you match software to your organization size and complexity.
The short answer: for nonprofits under $1M, Wave is free and works. For nonprofits $1-5M, QuickBooks Online Plus or Aplos is solid. For nonprofits $5M+, consider Sage Intacct or having a dedicated finance system.
But let's dig into specifics.
Wave: Free and Simple
Best for: Nonprofits under $500K annual budget, all-volunteer boards, minimal complexity.
Cost: Free. (They make money through payment processing.)
Key features: Basic accounting, invoicing, expense tracking, financial reports (P&L, balance sheet). Cloud-based. Mobile app available.
Nonprofit-specific features: Minimal. No built-in fund accounting. But you can create accounts to track funds manually.
Strengths: No cost. Clean interface. Easy to learn. Works well for straightforward nonprofits.
Weaknesses: No fund accounting built-in. Limited reporting. No multi-user access or permission controls (everyone who has access sees everything). Doesn't integrate with many tools. Support is chat-based, can be slow.
Implementation: A weekend. Very quick to set up.
QuickBooks Online Plus: The Most Popular Choice
Best for: Nonprofits $500K-$5M, organizations with payroll, multiple users, and moderate complexity.
Cost: $55/month for Plus plan. ($25/month for Simple Start, $45 for Essentials, but Plus is recommended for nonprofits.)
Key features: Accounting, payroll, invoicing, expense tracking, user permissions, extensive reporting, API integrations.
Nonprofit-specific features: No built-in fund accounting, but you can track via classes or locations. Limited nonprofit reporting features compared to Aplos.
Strengths: Industry standard. Most accountants and bookkeepers know it. Great integration options (connects to other software). Scalable as you grow. Good reporting. User permissions help with security.
Weaknesses: Can be pricey. Fund accounting requires workarounds. Learning curve steeper than Wave. Monthly cost vs. one-time software purchase.
Implementation: 2-4 weeks. Requires setup time, chart of accounts design, connecting bank feeds.
Aplos: Nonprofit-Built Accounting
Best for: Nonprofits $500K-$3M that want purpose-built nonprofit software.
Cost: $50-$120/month depending on features. Includes integrated donor management, which adds value.
Key features: Fund accounting built-in. Donor tracking. Project accounting. Grants tracking. Financial reports optimized for nonprofits. Cloud-based.
Nonprofit-specific features: Extensive. Fund accounting is native, not a workaround. Reports for funders. Integrated giving platform.
Strengths: Built specifically for nonprofits. Excellent fund accounting. Good reporting for grants and funders. Integrated donor database. Customer support is responsive.
Weaknesses: Smaller ecosystem (fewer integrations than QB). Might be overkill for very small nonprofits. Payroll requires a separate tool.
Implementation: 2-3 weeks. Less complex than QB because fund accounting is native.
Sage Intacct: Enterprise-Level
Best for: Nonprofits $5M+, complex grant structures, multiple locations, sophisticated operations.
Cost: $500-$2,000+/month. Enterprise pricing. Requires implementation consulting ($10K-$30K).
Key features: Advanced fund accounting. Multi-entity consolidation. Project and grant accounting. Advanced reporting. Compliance automation. Very scalable.
Nonprofit-specific features: Purpose-built for nonprofits and public sector. Grant accounting, fund restrictions, consolidation.
Strengths: Powerful and flexible. Can handle any nonprofit complexity. Good for organizations with multiple programs, locations, or entities. Strong audit trail.
Weaknesses: Overkill for nonprofits under $5M. Steep learning curve. Requires dedicated finance staff to operate. Expensive.
Implementation: 3-6 months. Requires data migration, configuration, significant setup.
Feature Comparison Table
| Feature | Wave | QB Online | Aplos | Sage |
|---|---|---|---|---|
| Cost | Free | $55/mo | $50-120/mo | $500+/mo |
| Fund accounting | Manual | Via classes | Native | Native |
| Payroll | No | Yes | Separate | Yes |
| Multi-user/permissions | Limited | Yes | Yes | Yes |
| Nonprofit reports | No | Limited | Yes | Yes |
| Integration options | Few | Many | Some | Extensive |
| Learning curve | Easy | Medium | Medium | Hard |
| Support | Chat | Phone | Phone | Dedicated |
Which Software by Organization Size
Starting out ($0-$100K): Wave. Free, simple, all you need. No need for payroll yet.
Growing ($100K-$500K): Wave still works. But if you have multiple programs/funders, consider Aplos. If you have payroll, consider QB Online Plus.
Established ($500K-$2M): Aplos (if fund accounting matters), QB Online Plus (if broad integration matters), or Wave (if you want to keep costs low and have simple structure).
Mature ($2M-$5M): QB Online Plus or Aplos. Both work well at this scale. QB if you need integrations, Aplos if nonprofit-specific features matter.
Large ($5M+): Sage Intacct. Or QB Enterprise (if you prefer QB ecosystem). Requires finance staff.
Implementation Tips
1. Set up your chart of accounts first. Before you enter anything in software, design your CoA (see Lecture 1.4.1). Know what accounts you'll have and how they're numbered. This prevents rework later.
2. Start with current data. Open accounting starting from today, not retroactively. If you have historical data, hire someone to enter it. This is tedious and error-prone if you do it yourself.
3. Test with dummy data first. Before going live, enter test transactions. Make sure you understand how the software works and that reports look right.
4. Connect bank feeds. Most software can automatically import bank transactions. This saves time and prevents manual entry errors. It's one of the best features.
5. Train the person doing daily work. Whether it's your Treasurer or a bookkeeper, make sure they know how to use the software. Most software vendors offer training. Take it.
6. Plan for transition. If you're switching from one system to another, budget 2-4 weeks for parallel running (using both systems at once). This catches errors before you fully cut over.
Red Flags When Choosing
Don't choose based on price alone. Wave is free, but if your actual needs require fund accounting, you'll waste time working around limitations. Cheaper isn't always better.
Don't choose software your accountant isn't familiar with. Your accountant will eventually review your books. If they don't know the software, it complicates audits and year-end closing.
Don't implement software designed for for-profits if you can use nonprofit-specific software. Aplos and Sage exist because generic software doesn't handle nonprofit nuances well.
Don't over-engineer. Many small nonprofits choose Sage when Wave would work fine. You'll spend on expensive software and consultants when simpler solutions exist.
Making Your Choice
To decide: (1) Estimate your annual budget. (2) Assess complexity (do you have multiple programs, restricted grants, payroll?). (3) Match to the size/complexity table above. (4) Try free trials (QB and Aplos offer them). (5) Ask other nonprofits in your area what they use. (6) Talk to your accountant about what they recommend.
Don't overthink it. Most nonprofits are well-served by QuickBooks or Aplos. Start there and you're unlikely to regret it.
For related guidance on accounting, see Lecture 1.4.1: Nonprofit Accounting 101 and Lecture 1.4.3: The Nonprofit Financial Dashboard.