Nonprofit Cloud: Accounting Subledger Deep Dive
As a follow-up to last week’s blog on Salesforce Nonprofit Cloud Spring 2020 Release features, we’re jumping into a deep dive of the Accounting Subledger product – the connection between fundraising and finance that will help you reconcile data and have consistency and transparency across accounting and fundraising operations.
What is Nonprofit Cloud Accounting Subledger?
Are you manually reconciling transactions between Salesforce and your financial system; swivel-chairing and cross-checking to make sure there are no mistakes? Well, Accounting Subledger is here to help!
Accounting Subledger is a new package installed on top of NPSP that will generate ledger entries for Opportunities and Payments, designed to be sent to an external accounting system.
This feature helps facilitate the preparation of your fundraising information for your accounting system with the hopes of saving fundraising and finance significant time and effort on reconciliation tasks by aligning data and connecting systems to ensure a single source of truth for revenue and payment data.
Learn more about the key features here.
What are the benefits of Accounting Subledger?
Ledger Entry Automation: Automatically creates Ledger Entry records designed to be sent to third-party accounting software – complete with pre-defined exportable reports. This saves time if your team is currently exporting gifts and transforming that data into transactions for your accounting system.
Ledger Entry Customization: Customize records to include data from other objects. Now there’s no need to do multiple data exports or complex reporting to pull the information you need for accounting – customize once and let Accounting Subledger do the work for you!
Financial Tracking: Supports both cash and accrual accounting and allows finance to track debits and credits, adjustments, write-offs, and reversals.
Accurate Financial Reporting: Ledger Entries are locked from custom automation – these are pristine financial records! Your finance team can rest assured that the resulting Ledger Entries have the correct amounts.
Accounting Subledger Licensing
As mentioned in our earlier blog, this is a new product from Salesforce and does come with additional costs. There are two licenses to choose from – Starter Edition and Growth Edition.
Below are some details about the two options, however, it’s always important to work with your Salesforce Account Executive to determine the best option for your organization.
|Starter Edition||Growth Edition|
|Recognize pledges and payments|
Manage adjustments, write-offs, and reversals
Generate Ledger Entries
Pre-defined reports for Quickbooks, Sage Intacct, and FinancialForce
|All Starter Edition functionalities|
Generate Debits & Credits
Create General Ledger Codes
Pre-defined reports for nine Accounting Systems*
So, which option is best for you?
When determining whether a transaction adds or subtracts revenue, is it sufficient to rely on the type of Ledger Entry?
Starter Edition helps your team quickly identify the purpose of each Ledger Entry with types:
- Allocation Ledger Entries (only for accrual accounting) represent the pledged amount – the amount counts as recognized revenue
- Transaction Ledger Entries represent the actual amount received for a payment
- Payment Ledger Entries represent the portion of a payment allocated to a specific fund
With Growth Edition, your team would likely leverage the GL code with the Credit Amount or Debit Amount (whichever is populated) on the Ledger Entry to correctly process the transaction.
Here’s what Growth Edition looks like with GL codes, Credit Amounts and Debit Amounts:
What to know before using Accounting Subledger
Before launching Accounting Subledger in your org, it’s important to ensure you’ve checked a few boxes:
Data Alignment: Ensure your finance and fundraising teams are aligned on the terminology, definitions, and data needed so that the end result meets all requirements.
Latest NPSP: Must have the latest version of NPSP installed
Enable Payment Allocations: If you’re currently using Salesforce, but are enabling Payment Allocations for the first time, consider the impacts to your current data and reporting structures.
Enable Automatic Payment Creation: Please note this is different from the setting for Enhanced Recurring Donations where you have the option to choose whether to enable automatic Opportunity creation.
Assign Default General Accounting Unit: Accounting Subledger automatically assigns Default GAU to any Opportunity (and its Payments) that don’t have allocations. However, this can be modified during gift entry or overridden through integrations.
Recurring Donations Considerations: If using Recurring Donations, Accounting Subledger only supports Enhanced Recurring Donations (not legacy Recurring Donations). If you’re not currently using Enhanced Recurring Donations, you will need to upgrade this first. Learn more about Recurring Donation updates in our Deep Dive blog here.
Other Important Considerations
- Ledger Entries cannot be deleted by normal methods, even by a system administrator. Ensure that you’ve configured all settings related to how Ledger Entries are created prior to clicking “Enable Ledger Entry Creation”.
- Be aware that data usage may increase significantly due to Ledger Entries. Enable Ledger Entry creation only after you’ve completed all configuration.
- Keep the total Payment amount equal to the Opportunity amount. Any imbalance can cause inconsistencies in Ledger Entries. For example, when using the “Schedule Payments” action on an Opportunity, there’s no automated system check that will keep track of the Opportunity amount.
- Adjustments made on the same day don’t necessarily create Ledger Entries for every edit – the scheduled job will run overnight, or whenever “Run Accounting Scheduled Job” is manually clicked.
- If there is too much automation or custom code in your organization, the Accounting Scheduled job may not be a viable option.
- Ledger Entries can be configured to auto-generate when users add or update gift information by enabling Accounting Triggers in Accounting Settings. Please note that you can also set a start date for when Ledger Entries should be created, and for which gifts by using filters.
- If Accounting Triggers are enabled, using Gift Entry, Batch Gift Entry, NPSP Data Import, or Single Gift Entry to create/update gifts generates additional Ledger Entries that may not be needed.
- For transferring data to your accounting system, discuss whether manual export or setting up an integration is most appropriate for your organization.
Some Tips and Tricks
- If it’s necessary to change the number of Payments on a gift, use the Schedule Payments action to enter the new number of unpaid Payments along with any changes to the interval then adjust amounts and dates as necessary (make sure the sum of all payments matches the Opportunity amount!).
- If a donor wants to change their designation for future payments, use the Manage Allocations page to adjust allocations on the Opportunity. This will update all related Payment Allocations, instead of individually updating each Payment Allocation record.
- Accounting Subledger will keep Payment Allocations and Opportunity Allocations in sync. However, deleting a Payment will cause the Opportunity Allocations and Payment Allocations to fall out of sync. Use Manage Allocations on the Opportunity to make the appropriate updates to get things back on track.
- If the NPSP Setting “Don’t Auto Schedule Default NPSP Jobs” (under Bulk Data Processes > Batch Process Settings) is enabled, the Accounting Scheduled job will not run.
How Traction on Demand Can Help
As one of the largest independent Salesforce consulting partners in North America, we’re here to support you as you explore this product. We’d love to talk through the features of Accounting Subledger and evaluate how they may or may not fit your unique needs. We can also help with your implementation strategy, customizations, training and enablement, data migration and more.
For more information check out this Accounting Subledger article on the Power of Us Hub.
Get in touch
We’d love to talk through the features of Accounting Subledger and evaluate how they may or may not fit your unique needs.