An update on NumFOCUS' Treasury Software Search

[Anthony Scopatz]

Hello All, 

I just wanted to give everyone a heads up on the state of the treasury's financial accounting.  This will probably precondition a cry for help :). Things have mostly been done on an ad hoc basis thus far.  I think that this is normal for most young organizations.  

However, I have been running exhaustive searches on various accounting software out there over the past nine months.  This is in an effort to both formalize how we work with projects (disbursing funds, accepting donations, etc) and to help keep records for our tax filings. 

We are in a unique-ish position in that we are a non-profit that is a confederacy of projects.  The overwhelming majority of accounting software out there does not come standard with critical features that we need.  If you don't believe me that this is a problem, the software freedom conservancy has these same issues and they have put out a call to hire a developer to work on it. 

The two main features we must have is 1) a first-class notion of projects / accounts, and 2) a reliable mechanism for storing and associating documents (invoices, receipts, email, etc) with individual transactions.  The permissioning for (1) has to be gotten right and the provenance for (2) has to be rock solid.

Inspired by a recent discussion with the board, I spent yesterday day re-researching all of the options I could think of and all of the advice that I have been given recently on this topic.  Once again nothing really suits our needs -- or does so within our price range / off the shelf.   Even tools open tools like GnuCash, Homebank, and Ledger which could theoretically be modified to fit our needs don't really work because the underlying model is so different.

So even though I set out to avoid rolling our own solution because I think it might cause problems in the long term, we need to get to the long term first.  After a lot of heartache I think we have to do this ourselves.  Having looked at so many of these kinds of programs, I have come up with what I believe is a minimal solution for our use cases.  I am going to try to hack out the model tonight. However, what I am going to write will not be Leah friendly... 

It also might not do all of the kinds of reporting, aggregation, and interfacing that people want right off the bat.  

That said, I would really appreciate any help I got on this front.   I know that we are all busy and have our own projects.  I do too.  But it is becoming critical for us to get this done.  So if you are interested in this kind of project OR if you have a vested interest in seeing NumFOCUS succeed please consider helping out and let me know.

This is supposed to be a minimal viable product.  I think a couple of days of sprinting on this will get the job done well enough.

Be Well

Anthony

NumFOCUS Treasurer

[Aron Ahmadia]

I can make some time for this.  Are you in Austin?  I should have some free evening time next week.

A

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[Nicolas Pettiaux]

Dear Anthony,

Reading your mail, a friend of mine wonder if http://www.sql-ledger.com/ would, possibly with some customizations, do the work.

Another suggest the full fledge ERP http://www.tryton.org/ (or its «brother» https://www.openerp.com/)

Best regards,

Nicolas

[Brian Granger]

Anthony,

> I just wanted to give everyone a heads up on the state of the treasury's
> financial accounting. This will probably precondition a cry for help :).
> Things have mostly been done on an ad hoc basis thus far. I think that this
> is normal for most young organizations.
>
> However, I have been running exhaustive searches on various accounting
> software out there over the past nine months. This is in an effort to both
> formalize how we work with projects (disbursing funds, accepting donations,
> etc) and to help keep records for our tax filings.

Yep, I think this makes sense.

> We are in a unique-ish position in that we are a non-profit that is a
> confederacy of projects. The overwhelming majority of accounting software
> out there does not come standard with critical features that we need. If
> you don't believe me that this is a problem, the software freedom
> conservancy has these same issues and they have put out a call to hire a
> developer to work on it.

Ouch - that smells wrong - I suppose it could be needed though.

> The two main features we must have is 1) a first-class notion of projects /
> accounts, and 2) a reliable mechanism for storing and associating documents
> (invoices, receipts, email, etc) with individual transactions. The
> permissioning for (1) has to be gotten right and the provenance for (2) has
> to be rock solid.

Some questions:

* Where are these feature requirements coming from? Legal counsel?
Tax/corp law?
* Is it strictly required that the *same* system handle both the
accounting and the associated documents?
* Does the solution have to be online/web based?
* Are there cost restrictions?
* How many people who end up needed to work with the software. Just a
treasurer/accountant? Each project?

> Inspired by a recent discussion with the board, I spent yesterday day
> re-researching all of the options I could think of and all of the advice
> that I have been given recently on this topic. Once again nothing really
> suits our needs -- or does so within our price range / off the shelf. Even
> tools open tools like GnuCash, Homebank, and Ledger which could
> theoretically be modified to fit our needs don't really work because the
> underlying model is so different.

What are the $ constraints? I have used Quickbooks before for a
multiproject small business and it worked very well. From some quick
Googling, it looks like there are add-ons to enable it to manage
associated documents. What were the problems identified with
Quickbooks. I was going to offer to talk to a friend of mine who is a
CPA, but I have a feeling I know exactly what she would say = use
quickbooks. For small/medium business, QuickBooks is also a format
that tax CPAs work with regularly.

> So even though I set out to avoid rolling our own solution because I think
> it might cause problems in the long term, we need to get to the long term
> first. After a lot of heartache I think we have to do this ourselves.
> Having looked at so many of these kinds of programs, I have come up with
> what I believe is a minimal solution for our use cases. I am going to try
> to hack out the model tonight. However, what I am going to write will not be
> Leah friendly...

In my mind, I would say that we should avoid rolling our own solution
at *all* costs. Because it is outside our own expertise the "cost" of
our doing this will exceed the cost of paying for even a horribly
expensive off-the-shelf solution.

Do you think it would be helpful if I talked to my CPA friend to see
what they advise?

> It also might not do all of the kinds of reporting, aggregation, and
> interfacing that people want right off the bat.
>
> That said, I would really appreciate any help I got on this front. I know
> that we are all busy and have our own projects. I do too. But it is
> becoming critical for us to get this done. So if you are interested in this
> kind of project OR if you have a vested interest in seeing NumFOCUS succeed
> please consider helping out and let me know.
>
> This is supposed to be a minimal viable product. I think a couple of days
> of sprinting on this will get the job done well enough.

I can't state my objection to this plan strongly enough. If
NumFocus's success means that our prized developers have to write
accounting software, then we need to go back to the drawing board and
redefine what success means. I think this is an example of the
hammer/nail effect - when you have a hammer (coding skills) every
problem looks like a nail.

At the same time, I feel compassion for you personally that you are
having to wade through all of this. I am not quite volunteering to
help out formally, but I have done accounting before and have CPAs I
can talk to if that would be helpful.

Cheers,


Brian

> Be Well
> Anthony
> NumFOCUS Treasurer
>

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Brian E. Granger
Cal Poly State University, San Luis Obispo
bgra...@calpoly.edu and elli...@gmail.com

[Anthony Scopatz]

Hey Aron, 

Thanks for offering to help out!  Unfortunately, I am not back in ATX until early October.  I am going to reply to Brian and we'll see where this ends up going.

Be Well

Anthony

[Anthony Scopatz]

On Fri, Sep 6, 2013 at 9:47 PM, Brian Granger <elli...@gmail.com> wrote:

Anthony,

> I just wanted to give everyone a heads up on the state of the treasury's
> financial accounting.  This will probably precondition a cry for help :).
> Things have mostly been done on an ad hoc basis thus far.  I think that this
> is normal for most young organizations.
>
> However, I have been running exhaustive searches on various accounting
> software out there over the past nine months.  This is in an effort to both
> formalize how we work with projects (disbursing funds, accepting donations,
> etc) and to help keep records for our tax filings.

Yep, I think this makes sense.

> We are in a unique-ish position in that we are a non-profit that is a
> confederacy of projects.  The overwhelming majority of accounting software
> out there does not come standard with critical features that we need.  If
> you don't believe me that this is a problem, the software freedom
> conservancy has these same issues and they have put out a call to hire a
> developer to work on it.

Ouch - that smells wrong - I suppose it could be needed though.

> The two main features we must have is 1) a first-class notion of projects /
> accounts, and 2) a reliable mechanism for storing and associating documents
> (invoices, receipts, email, etc) with individual transactions.  The
> permissioning for (1) has to be gotten right and the provenance for (2) has
> to be rock solid.

Hello Brian, 

Thanks for such a thorough response. 

 

Some questions:

* Where are these feature requirements coming from?  Legal counsel?
Tax/corp law?

The notion of projects is coming from the desire to have regular, easy reporting

to the actual projects.  So that projects can't see each others accounts this 

requires some sort of permission. 

Keeping great documentation comes from legal counsel in case of an audit.

 

* Is it strictly required that the *same* system handle both the
accounting and the associated documents?

Personally, yes.  I think having two separate systems is too easy to break, 

too difficult to hand off to the next treasurer, and frankly makes too much

busy work for the treasurer.  I can easily imagine many workflows that 

involve two+ systems.  But I think they are all too fragile in the event of 

an emergency. And I am being a little selfish.

 

* Does the solution have to be online/web based?

No.  Just backup-able.

 

* Are there cost restrictions?

I'd say within reason.  If we get too pricey I'll make a formal request to 

the board and if it is too expensive we just won't be able to afford it.

 

* How many people who end up needed to work with the software.  Just a
treasurer/accountant?  Each project?

For the time being, it can just be the treasurer / accountant as long as there

is a per project reporting mechanism.  Especially in a Grantor / Grantee model, 

the projects shouldn't have direct access to funds.

 

> Inspired by a recent discussion with the board, I spent yesterday day
> re-researching all of the options I could think of and all of the advice
> that I have been given recently on this topic.  Once again nothing really
> suits our needs -- or does so within our price range / off the shelf.   Even
> tools open tools like GnuCash, Homebank, and Ledger which could
> theoretically be modified to fit our needs don't really work because the
> underlying model is so different.

What are the $ constraints?  I have used Quickbooks before for a
multiproject small business and it worked very well.  From some quick
Googling, it looks like there are add-ons to enable it to manage
associated documents.  What were the problems identified with
Quickbooks.  I was going to offer to talk to a friend of mine who is a
CPA, but I have a feeling I know exactly what she would say = use
quickbooks.  For small/medium business, QuickBooks is also a format
that tax CPAs work with regularly.

So in my previous searches into quickbooks, it seems like this would satisfy

most needs, except the document handling one.  However, on using longer 

google queries tonight, I did find SmartVault which seems to add the desired

features.  I am not sure how I missed this in the past.  This seems to the only 

quickbooks-based product like it.

 

> So even though I set out to avoid rolling our own solution because I think
> it might cause problems in the long term, we need to get to the long term
> first.  After a lot of heartache I think we have to do this ourselves.
> Having looked at so many of these kinds of programs, I have come up with
> what I believe is a minimal solution for our use cases.  I am going to try
> to hack out the model tonight. However, what I am going to write will not be
> Leah friendly...

In my mind, I would say that we should avoid rolling our own solution
at *all* costs.  Because it is outside our own expertise the "cost" of
our doing this will exceed the cost of paying for even a horribly
expensive off-the-shelf solution.

Do you think it would be helpful if I talked to my CPA friend to see
what they advise?

Quickbooks is the option that I have heard from many business people 

and CPAs.  I don't think that you need to do ping your friend.  But thanks 

for offering.

 

> It also might not do all of the kinds of reporting, aggregation, and
> interfacing that people want right off the bat.
>
> That said, I would really appreciate any help I got on this front.   I know
> that we are all busy and have our own projects.  I do too.  But it is
> becoming critical for us to get this done.  So if you are interested in this
> kind of project OR if you have a vested interest in seeing NumFOCUS succeed
> please consider helping out and let me know.
>
> This is supposed to be a minimal viable product.  I think a couple of days
> of sprinting on this will get the job done well enough.

I can't state my objection to this plan strongly enough.

Due to your conviction, I am going to go back and try the Quickbook + SmartVault

option.  I wouldn't be happier if than if this turns out to be viable.  I'll try to 

do that this weekend rather than writing something ourselves.

 

 If NumFocus's success means that our prized developers have to write
accounting software, then we need to go back to the drawing board and
redefine what success means.  I think this is an example of the
hammer/nail effect - when you have a hammer (coding skills) every
problem looks like a nail.

I completely agree; this is definitely hammer smashing mode.  Which is why

I delayed so long and kept looking for off the shelf solutions.  Unfortunately, 

we are / I am now at the point where concrete action is required.

 

At the same time, I feel compassion for you personally that you are
having to wade through all of this.  I am not quite volunteering to
help out formally, but I have done accounting before and have CPAs I
can talk to if that would be helpful.

Thanks.  That means a lot given how frustrating this has been.  I'll report 

back in a few days.

Be Well

Anthony

[Anthony Scopatz]

Hello All, 

I know that this is more than the few days I originally promised.  Life got in the way.  That said, I am happy to report that Quickbooks Online and Smart Vault together seem to be a completely viable solution to our needs.  I am going to proceed fully down this path.  Within the next couple of weeks we should have everything converted over.  At that point we'll start testing out reporting to the project contacts.  As always, I expect to use IPython as the guinea pig.  

Thanks for insisting that I reexamine this Brian.  

Be Well

Anthony

[Leah Silen]

Yea!!!  This is great news. Thanks Anthony!

[Brian Granger]

Great!

[Fernando Perez]

On Sun, Sep 22, 2013 at 6:40 PM, Anthony Scopatz <sco...@gmail.com> wrote:
> Hello All,
>
> I know that this is more than the few days I originally promised. Life got
> in the way. That said, I am happy to report that Quickbooks Online and
> Smart Vault together seem to be a completely viable solution to our needs.
> I am going to proceed fully down this path. Within the next couple of weeks
> we should have everything converted over. At that point we'll start testing
> out reporting to the project contacts. As always, I expect to use IPython
> as the guinea pig.

Happy as little pigs to help. Thanks, as always, for the enormous
amount of time and effort you put into this!!

Cheers,

f

[lndn]

Dear Anthony,

I know I'm a little late to this discussion, but it's such an important topic that has long-term impact into your future Form 990 filings, that I wanted to chime in and even provide help if you require.  I have helped setup and run an accounting system for a 501(c)3 nonprofit during its first five years of operation and we ran into many of the same questions you had. 

(1) Chart of Accounts 

If you want a "first-class notion of projects / accounts", then take a look at the Unified Chart of Accounts (UCOA - http://nccs.urban.org/projects/ucoa.cfm).  The Unified Chart of Accounts is the only effort that aims to standardize financial reporting across the nonprofit sector and was built specifically to help file Form 990.  The UCOA is customized specifically to make it easy for you to transfer your accounts, line by line, onto Form 990.  It's extremely flexible, allowing you to add any number of accounts/projects as your organization wishes.  You can quickly generate reports from within Quickbooks that gives you information you need as a nonprofit.  Setting up UCOA (just import the file into QB) is easy, then just customize it to your wish.  I can help you with this.

(2) Go with QuickBooks

I second Brian Granger's caution against rolling out your own system.  We went with QB because:

- Nonprofits can obtain the latest version of the software for $45 (I can help you obtain this software or maybe donate it to you)

- Juts about all CPA's have QB, just give them your file and they will help you do your filings

- It's easy to use, small learning curve only because you have to understand accounting to properly use it

I'm not sure how far along you are with configuring the financial system, but please contact me if you require assistance.

Thanks for all your help into this,

London

[Anthony Scopatz]

On Fri, Sep 27, 2013 at 3:48 AM, lndn <deve...@studioart.org> wrote:

Dear Anthony,

I know I'm a little late to this discussion, but it's such an important topic that has long-term impact into your future Form 990 filings, that I wanted to chime in and even provide help if you require.  I have helped setup and run an accounting system for a 501(c)3 nonprofit during its first five years of operation and we ran into many of the same questions you had. 

(1) Chart of Accounts 

If you want a "first-class notion of projects / accounts", then take a look at the Unified Chart of Accounts (UCOA - http://nccs.urban.org/projects/ucoa.cfm).  The Unified Chart of Accounts is the only effort that aims to standardize financial reporting across the nonprofit sector and was built specifically to help file Form 990.  The UCOA is customized specifically to make it easy for you to transfer your accounts, line by line, onto Form 990.  It's extremely flexible, allowing you to add any number of accounts/projects as your organization wishes.  You can quickly generate reports from within Quickbooks that gives you information you need as a nonprofit.  Setting up UCOA (just import the file into QB) is easy, then just customize it to your wish.  I can help you with this.

Hey London, 

What a great find!  Thanks.  I think I am far enough along at this point that it doesn't make a whole lot of sense to go to this model right now, though I'd like to in the future.  Right now I need to focus on getting all of the transactions for the past 2 years into QB and accepted and then handing this off to TANO to file our taxes.

After this, though, I would love help refactoring what I have.  If you are interested in joining the NF financial team more seriously, please ping me off-list.

 

(2) Go with QuickBooks

I second Brian Granger's caution against rolling out your own system.  We went with QB because:

- Nonprofits can obtain the latest version of the software for $45 (I can help you obtain this software or maybe donate it to you)

- Juts about all CPA's have QB, just give them your file and they will help you do your filings

Yes.  These outweigh a lot of other hurdles.

 

- It's easy to use, small learning curve only because you have to understand accounting to properly use it

I would say that this is true only if you understand double-entry bookkeeping systems already.  Until about a month ago, I had a hard time grokking what their purpose was at all.   This process has shown me that I was not a born accountant.  Now that I understand what the tool is, I agree that QB does a nice job of it.

Be Well

Anthony

 

I'm not sure how far along you are with configuring the financial system, but please contact me if you require assistance.

Thanks for all your help into this,

London

--

[Anthony Scopatz]

Hello All, 

I am super pleased to announce that I have now fully integrated all of our accounting into Quickbooks Online!  This includes all bank account (including PayPal) transactions we have ever had.  I have moved on testing automatic reporting for IPython.  If this is successful, the other projects will follow shortly.  

I'd like to mention that in terms of record keeping and potential audits SmartValut really is a key piece of technology.

Setting up this accounting system for our ~1250 transactions to date was an incredibly tedious process even using the mostly automated tools*. However, now that everything is set up I anticipate smooth sailing from here.

Finally, it is over.

Be Well

Anthony

* I had to tap into the hacker within me to reverse engineer the qbo file format so I wouldn't have to manually type in 786 historical PayPal transactions.  Despite my searches there don't seem to be existing tools to do this.

[Travis Oliphant]

Anthony, 

You rock!  This is amazing work. 

-Travis

--

Travis Oliphant

Continuum Analytics, Inc.

http://www.continuum.io

[Leah Silen]

This is AWESOME Anthony!!!  I know it was a monumental task. Thank you!

Leah

[Aron Ahmadia]

I know who's getting a calculator, pocket protector, and a new pen for Christmas this year!

[Fernando Perez]

No kidding! Anthony, thank you so much!!

Fernando Perez (@fperez_org; http://fperez.org)
fperez.net-at-gmail: mailing lists only (I ignore this when swamped!)
fernando.perez-at-berkeley: contact me here for any direct mail

[Anthony Scopatz]

Thanks all!

And Aron, what I'd really love is a second 5 1/4 floppy drive so I can run programs once the computer has booted =).