Automating nonprofit accounting: 5 insights from 3 nonprofit accounting leaders

The short version

If your nonprofit back office still runs on paper, spreadsheets, and approval chains nobody outside finance wants to touch, that setup is quietly costing your mission. It hides fraud risk, slows your audits, and keeps financial data away from the program leaders who need it most. The cost argument that justified going manual 20 years ago does not hold anymore, which is why automating nonprofit accounting has become a foundational move rather than an upgrade.

Jackie McLaughlin (Chazin & Company), Ashley Norkunas (Accountix), and Levi Morehouse (Mission First Operations) know what separates financially healthy nonprofits from the ones still operating, in Jackie's words, like it's 1984. Together, the three firms cover nonprofits from early-stage startups to $300M organizations.

Most useful for: Controllers, outsourced accounting partners, and nonprofit EDs evaluating whether their AP, expense, and reporting workflows are working.

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What does automating nonprofit accounting mean?

Automating nonprofit accounting means replacing manual, paper-based bookkeeping, AP, expense, and reporting tasks with software that captures transactions, applies fund and grant restrictions automatically, and routes approvals digitally. It is the back-office work, not the donor stewardship or volunteer management side, that this article is about.

In a typical nonprofit, five accounting workflows are the highest-value candidates to automate first.

• AP and bill payments: Invoices arrive digitally, approvals route to the right person, and payment goes out by ACH or virtual card instead of paper check.
• Expense management: Card transactions feed directly into the general ledger, receipts and program codes get captured at point of swipe, and reimbursements run on a digital approval flow rather than a paper form.
• Fund accounting and restricted donations: Restrictions on grants and donor-designated funds are enforced in the ledger automatically, not tracked in a side spreadsheet.
• Donor and grant data integration: Donation platforms and donor management systems sync to the accounting system so revenue and restrictions land in the GL without re-keying.
• Audit trail and 990 reporting: Every transaction, approval, and access event is recorded automatically, which collapses audit prep and Form 990 preparation from weeks to days.

Insight 5 from the webinar panel is where Levi explains the non-financial user experience rule that determines whether any of this actually gets adopted. Jackie returns to two themes: the cost of automation has dropped enough that small and mid-sized nonprofits can afford it, and the modern controls automation provides are the strongest answer to nonprofit fraud risk.

Why does nonprofit finance still feel like 1984?

If you work in nonprofit accounting, you already know it's its own discipline. Fund accounting, donor restrictions, grant compliance, and board-level reporting that for-profit work doesn't touch. Only 15% to 25% of the CPA exam covers any of it, which means most accountants you hire won't have the training.

Jackie's framing is that many of the nonprofits her firm onboards are still running paper invoices, manual approvals, and outdated technology. They're functioning like it's 1984, not because leadership wants it that way, but because nobody has shown them what the modern alternative costs or does. The mission stays first, as it should, but the back office stays last, which the mission can't afford.

5 insights on modern nonprofit finance

The panel's five insights are diagnostic, not prescriptive. They explain why nonprofit finance still struggles and what changes when leadership treats the back office as part of the mission.

1. Nonprofits can and should run a surplus

Jackie opens the panel with what she calls the first myth: that nonprofits can't make a profit. They can, and they should, because financial sustainability is what funds the next year of mission work. Every other mistake she sees in the sector traces back to leadership teams that haven't made that mindset change.

According to Jackie, grantors want to grant money to financially healthy organizations. A surplus is the proof of financial sustainability that signals a nonprofit can keep its mission running through a normal funding gap.

Reframing surplus as mission fuel is cultural work, not accounting work. Your board has to internalize it, and your ED has to budget for it. Program leads need to understand that a healthy reserve isn't money taken from their work. It's what keeps their work going next year. Ramp's Cash Flow Playbook: How to Engineer Financial Resilience Before Your Business Needs It webinar digs into the cash flow planning side of this.

"The first myth is that nonprofits can't make a profit, and they can make a profit. And in fact, they should make a profit to sustain themselves... grantors want to grant money to financially healthy organizations."

2. Most accountants are not trained in nonprofit accounting

Most accountants graduate without meaningful training in nonprofit accounting, and the CPA exam is a big reason why. Only 15% to 25% of it covers the topic. In Jackie's experience, if you hire a general accountant without that background, you can end up with errors in your financial statements.

The fix is either a specialist hire or a partner whose entire practice is built around nonprofits. Ashley describes a related model at Accountix, where clients get paired with a full accounting department rather than a single accountant, so coverage and expertise scale together.

Both firms also lean hard on translation, which Ashley calls storytelling. Jackie's team pulls ASC 606 and similar jargon out of conversations with executive directors. Instead, they translate the numbers into language a board member or program lead can act on. Financial information that nobody understands doesn't change behavior, and changing behavior is the entire point.

"We like to put the story with the numbers because they might look at any sort of financial statement and be like, I have no idea what this is telling me. And so that's what we like to say is, we'll tell you this story so that you understand what's coming through the numbers and what to do with them."

3. The two C's and an E cultural test

Levi's diagnostic for whether financial discipline will stick at a nonprofit is two C's and an E. Nonprofits that manage their finances well share three traits, and if yours is struggling, you're probably missing at least one.

• Care comes from the top. Leadership treats the books as a core function, not an afterthought, and builds budgets intentionally instead of copying last year's.
• Consistency means regular reporting, regular budget review, and pushing financial data all the way down to the program level so program leaders can use it.
• Easy is the make-or-break. If the back-office workflow is heavy, the mission will always win, staff will deprioritize finance work, and the first two C's collapse under the calendar.

Levi's framing is that the mission is served best when the back office is functional and foundational. Easy is the design constraint that keeps care and consistency sustainable in real operating weeks.

"The E is that they make it easy. It's never easy. There's a little work to be done. It takes a little bit of effort. But if that is too much and overkill, it gets trumped. If it's not easy, then the care and the consistency won't ever win because the mission's just too important."

4. Fraud is the framing that moves nonprofits to act

If you want to get a resistant nonprofit leader to modernize their back office, talk about fraud. The 2024 ACFE Report to the Nations found that 10% of all studied occupational fraud globally occurs in nonprofits. Jackie notes that many nonprofit leaders sit back and think "we have great people, and none of our people would ever do this," and the data is what changes the conversation.

Jackie points to fraud prevention as a driver that gets attention, noting that the word "fraud" tends to make leaders engage with change. The automated solutions Levi describes have checks and balances built in that paper-based processes can't replicate. Ramp's Breaking AP Bottlenecks with Bill Pay Automation: Navion's Payments Story webinar walks through how Navion implemented these controls from invoice intake through payment.

The same automation cuts your audit-season burden. Jackie's firm gives auditors read-only access to the software they use so the auditors can pull their own samples. That means a lot less demand on her staff and the client's internal staff during an audit.

"One of the reports that came out in 2024, it's called Reports to the Nation done by the certified fraud examiners. They said ten percent of all fraud globally occurs in nonprofits... Desperate people can do desperate things, and you just don't know what you don't know about people who work for you."

5. Non-finance UX decides whether your stack gets adopted

Here's Levi's rule: the non-financial end users matter most. Accountants and finance staff will adapt to almost any tool, but if the people on the front end can't actually use it, adoption fails regardless of how powerful the back end is.

That's why Mission First standardized on Ramp across its nonprofit clients. About 2 years ago, Levi tested several AP solutions and rolled Ramp out to a few clients first. Ramp was the only tool he had put in the hands of non-financial end users that they actually really appreciated, so his team moved all their clients onto it.

Levi's full evaluation rubric has four parts.

1. Non-finance user experience comes first. Coding an expense report should feel as low-friction as ordering ice cream on DoorDash
2. Less is more. It's easy to end up with too many systems. Consolidate where you can. (Ashley puts the same principle in concrete terms: nonprofits sometimes end up with 20 logins to do basic work)
3. Integration matters at the detail level. Every system has to pass program-and-fund-level detail cleanly to every other system
4. Vendor durability beats novelty. Switching costs are higher in nonprofits than in startups. Vet vendors so you don't have to swap them out in 18 to 36 months

"The most important piece is that it's the only tool I've put in the hands of the non financial end users that they actually really appreciated. So the cards, the reimbursements, the AP approvals are just easier than anything else. It's still a little bit of work, but it's easier. It's a good user experience."

5 nonprofit accounting workflows worth automating first

The panel keeps returning to one operational point: the back-office accounting work is where automation pays off first in a nonprofit. Below are the five workflows where automation has the biggest financial-health and fraud-prevention impact, mapped to where the panel touched on them.

AP and bill payments

This is the workflow Jackie's fraud framing is built around. Paper invoices, manual approvals, and paper-check disbursement are where fraud risk concentrates and where audit prep eats the most staff hours. Automating it gives you the checks and balances Jackie describes as the answer to nonprofit fraud risk. Mission First standardized its nonprofit clients on Ramp specifically because the AP approval and bill-pay flow was the only one their non-financial users described as actually working (see Insight 5).

Expense management

Expense reports are where Levi's non-financial UX rule pays off most immediately. Cards swipe directly into the ledger, receipts get captured at point of purchase, and program staff who used to dread monthly expense reports can finish them faster. Levi's evaluation rubric ranks this experience higher than any back-end capability for a reason: if non-financial users won't use the tool, the back-end power is wasted (Insight 5).

Fund accounting and restricted donations

This is the workflow that makes nonprofit accounting its own discipline. Restricted grants, donor-designated funds, and program-level budget allocations have to be tracked against actuals continuously, not reconciled at month-end.

Automated fund accounting enforces those restrictions in the ledger rather than in a side spreadsheet, which means a program lead can pull program-level numbers without an accountant translating them first. The panel did not walk through fund-accounting automation tools specifically, but the discipline lives upstream of every other piece of the back office.

Donor and grant data integration

Donation platforms, donor CRMs, and grant-management systems each touch the GL. When they sync automatically, revenue and restrictions land in the accounting system without re-keying, and program-level reporting can run in real time. This is the data foundation behind the storytelling Ashley described in Insight 2. The story only writes itself in real time if the data is already integrated.

Audit trail and 990 reporting

Automation collapses audit prep because every transaction, approval, and user action is logged by default. Jackie's firm gives auditors read-only access to the automated systems so they can pull their own samples (see Insight 4). Ashley also mentioned that her firm has tightened its partnerships with the CPA firms doing the audit and the 990s for the same reason: when the data is already in one place and audit-grade, both the audit and the 990 prep become much faster for the client.

How do you apply the panel's advice?

Here are a few starting points drawn from what the panelists emphasized:

• Reframe surplus internally: Jackie's first myth is the place to start. If your board and leadership still treat a surplus as suspect, the financial-health argument that grantors respond to never gets made
• Use fraud framing on resistant leaders: In Jackie's experience, efficiency arguments stall, but fraud prevention doesn't. The 10% ACFE figure is the conversation-starter, paired with a question about whether your current AP process has real checks and balances
• Weigh non-financial UX above feature lists: Levi's rule is that non-financial users decide whether a tool gets adopted. If they won't use it, the back-end power doesn't matter
• Pick one accounting workflow to automate first: The panel's emphasis suggests AP and bill payments is the most common starting point because the fraud-and-audit math is clearest, with expense management close behind for the non-financial UX win

For a real-world look at bringing structure to a high-volume AP environment, Taking Control of High-Volume AP: How Byler did it covers an implementation in detail.

Final thoughts

"Many of them function when they come to us, like it's 1984. And so we try and educate them and bring them into the twenty first century with their technology and paperless flows and automated workflow approvals, and that's worked very well. They're open to it. I think they don't necessarily know it's out there and available to them."

The nonprofit sector is ready to move. Most leaders just haven't seen what's available yet. The math has changed, the tools have changed, and the fraud risk hasn't. If you've been putting off automating nonprofit accounting, the reasons to wait are running out.

See how Ramp fits in

The panel keeps returning to the same problem: paper-based AP, scattered expense workflows, and approval chains that no non-financial user wants to touch. You can replace all three with a single tool that sits in front of your accounting system and gives you the checks and balances and integration depth your nonprofit requires.

Common questions about automating nonprofit finance

What is nonprofit accounting automation?

Nonprofit accounting automation is the replacement of manual, paper-based accounting tasks (AP, expense management, fund tracking, reporting, audit prep) with software that captures transactions, enforces fund restrictions, routes approvals digitally, and logs everything for the audit trail.

It is distinct from broader nonprofit automation, which covers donor stewardship, volunteer scheduling, and grant submission workflows. Accounting automation specifically targets the back-office finance work that ends up on the financial statements and the Form 990.

Which accounting workflows should a nonprofit automate first?

Based on the panel's emphasis, AP and bill payments usually come first because they carry the strongest fraud-and-audit case (per the 2024 ACFE figure Jackie cites). Expense management is a close second because the non-financial user experience win is immediate for program staff and EDs. From there, donor and grant data integration and audit-trail reporting are the next-most-common automation projects.

Why is nonprofit accounting harder than for-profit accounting?

Nonprofit accounting requires fund accounting, donor restrictions, grant compliance, and board-level reporting, none of which get much coverage on the CPA exam (only 15% to 25%). In Jackie's experience, that gap shows up as errors in your financial statements when you hire a generalist without nonprofit-specific support. The fix is either a specialist hire or a partner whose practice is built entirely around nonprofits.

How do we know if our nonprofit is vulnerable to fraud?

Jackie cites the 2024 ACFE Report to the Nations, which found that roughly 10% of studied occupational fraud globally occurs at nonprofits. Many nonprofit leaders assume their culture prevents fraud, but the data is what shifts the conversation. Automated AP tools provide checks and balances that paper-based processes can't replicate.

What should we evaluate first when picking financial tools?

In Levi's experience, the front-end user experience for non-financial users is the most important factor, because the people on the front end of the tool decide whether it gets adopted. After that, look at how many systems you're stacking, the depth at which systems pass program-and-fund-level data to each other, and the durability of the vendor itself. Switching costs are higher in nonprofits than in startups, so a re-implementation in 18 to 36 months is a real cost.

Has the cost of automating nonprofit accounting changed?

Twenty to 25 years ago, automating accounting processes was, in Jackie's words, very expensive. Many nonprofit leaders still think of $20,000 to $40,000 price tags when they hear "automation." That perception is part of why modernization proposals get shelved before they get read, but the math has changed. Modern AP and expense automation is affordable enough that a small or mid-sized nonprofit can deploy it without a capital project, and the hesitation now is often awareness rather than cost.