Nonprofit accounting has a number of unique requirements. Sage Intacct is one of the few financial management solutions on the market built to accommodate them specifically.
A good example of that is the release for restriction feature. One long standing challenge of nonprofit accounting is that donors can dictate that funds only be used for specific purposes or within an arranged time period. These requirements are known as “restrictions”, and when funds are used for the intended purpose, they are “released.” As of 2017, the Federal Accounting Standards Board (FASB) required nonprofits to make it clear on financial statements which funds are being held for restriction and which have been released. Meeting this standard adds yet another wrinkle to nonprofit accounting – which is why Sage Intacct created a dedicated feature to make compliance a breeze.
What is the Release for Restriction Feature?
The release for restriction feature allows accountants to pool expenses incurred with restricted funds. Automation takes the total of those expenses and pulls them into a release journal entry which then debits and credits a “release from restriction” general ledger account. On the debit side, expenses tagged as “with donor restriction” are subtracted from the net restricted balance, while on the credit side, expenses tagged “without donor restriction” are added to the net unrestricted balance.
Why Use the Release for Restriction Feature?
For the simple reason that it makes a complicated and consequential requirement easier to complete correctly and compliantly. Without the feature, nonprofit accountants would have to spend more time finding, moving, and calculating numbers manually, which distracts them from other obligations while raising the risk of errors. Most accountants who have dealt with restricted funds wish there was a better way. Sage Intacct delivers exactly that.
Who Has Access to the Release for Restriction Feature?
Any organization that has Sage Intacct and configured it with the “nonprofit quickstart template” will have access to the release for restriction feature. To make it work as intended, however, accountants will need to create Dimensions (“tags” that describe the details of individual transactions) that identify funds as either “with donor restriction” or “without donor restrictions.”
How Do You Enable the Release for Restriction Feature?
The first step is to check whether Sage Intacct was set up with the “nonprofit quickstart template” mentioned above. Go to Company>>Setup>>Company, click on the accounting tab, then look at the bottom of the page where it will identify if a setup quickstart template was used.
If so, an admin can enable the release for restriction feature by following the pathway, General Ledger>>Setup>>Configuration, then select the checkbox next to “enable nonprofit restriction release.” Set user permissions to “generate restriction release” and “general ledger – close books” and set the user type to “business.”
Sage Intacct – A Complete Solution for Nonprofit Accounting
Plenty of tools can help with nonprofit accounting, but few if any offer a complete solution customized for the kinds of compliance requirements and accounting obligations unique to 501C organizations.
In addition to the release for restriction feature, Sage Intacct offers these features to make nonprofit accounting more efficient, accurate, and insightful than it has ever been before:
- Grant tracking and billing
- Multi-entity and global consolidations
- Nonprofit digital board book
- Nonprofit revenue recognition
- Spend Management
These powerful features are suitable for nonprofits of all shapes and sizes: community-development organizations, faith-based organizations, NGOs, foundations and philanthropic organizations, membership organizations, and more.
For nonprofits without an adequate accounting tool in place, consider implementing Sage Intacct. For nonprofits that already have Sage Intacct, get the release from restriction feature set up. And for nonprofits using the feature already, explore other ways that Sage Intacct can perfect nonprofit accounting. RSM can help all these organizations. Rely on us to make implementing, optimizing, and utilizing Sage Intacct easy for all. Contact us at your convenience.