If you feel like you’re getting the cold shoulder from your non-profit prospects, it could be because they’ve been burned by other HCM vendors in the past. Non-profits need to be very careful with their spending, and they live in a once-bitten-twice-shy reality.
That doesn’t mean you can’t win big contracts with non-profit organizations — it simply means you need to understand how to win over customers that have been burned by other payroll providers.
In this article, we’ll unpack one of the greatest frustrations non-profits have with HCM systems, and how you can provide a solution your competitors can’t beat.
When HCM Solutions Don’t Deliver to Non-profit Customers
Non-profit organizations need to provide funding reports that account for every penny that’s spent on the grants they receive. Because employees can be working under several grants each pay period, it’s critical to track time spent on each grant.
Allocating salaries across funding sources is an intensive manual process that can take as much as ten hours or more. Non-profits are often told that an HCM vendor can handle their salary allocation needs. But what the sales rep means is often different from what the customer is looking for.
Many HCM solutions can provide estimated salary allocations, but they typically aren’t able to allocate actual time data. It’s a projection, which means if the actual allocation of salary is different than the estimate, non-profits have to go back and recalculate their hours or provide a false report to their funding sources.
When an HCM vendor offers salary allocation, it sounds like a great benefit. Only later does the customer realize that the salary allocation doesn’t do what they had expected. The non-profit now feels frustrated, and they become suspicious of similar promises from other vendors.
Why Salary Allocation Is a Big Deal for Non-profits
Salary allocation is a major concern for non-profit organizations. Inaccurate reporting can land a non-profit organization in serious trouble, leading to an unplanned audit that results in a loss of vital funding. An audit is one of the biggest fears that a non-profit faces.
Because non-profit organizations are so heavily funded, they’re in constant high-alert about losing their grants. Not only will they lose important programs, but they could potentially lose key staff. The organization itself could be forced to shut down.
You can alleviate that fear by offering automated salary allocation that uses actual data instead of fixed estimates. IDI has a proven track record for helping our partners to close the deal, even when the customer feels that they’ve been let down by HCM vendors.
Related reading: Spend More Time On Your Mission and Less Time on Grant Reporting
IDI Automates Salary Allocation and Reporting
IDI’s integration software hooks into the actual time data and automatically populates it across grants. There’s no need to guess ahead and fix later. Salaries are allocated accurately every time, down to the penny. IDI’s solution:
- Automates allocation of salaried earnings.
- Automates allocation of hourly employees’ overtime and non-worked time.
- Provides payroll with the accurate details needed for reports to government and funding sources.
IDI’s salary allocation allows your non-profit customers to confidently report accurate numbers, without spending a quarter of their week on endless calculations. And combined with our grant budgeting and management add-on tool, IDI helps ensure that they don’t overspend (or underspend) their funding too quickly. Your customers can course-correct their spending as they go so there’s no sudden panic at the end of the quarter to make the numbers work.
Like many non-profit organizations, Whitman-Walker Health is funded by grants. They needed a partner that could help save the time it took to produce accurate and consistent manual reporting.
IDI worked with our HCM partner to configure our integration application to sit in between time and payroll, with logic to automate the allocations of employees’ worked and non-worked time across grants. Now Whitman-Walker can easily track how each employee is spending their time and accurately show the time spent across each grant.
“When the grant team pulls the information from the general ledger, the hours are there, the salary is there, broken down by the person to various grants that they work on,” said Payroll Manager Desmond Qualey. “Payroll was a 15-day process, which is down to a 1-day process...I have gone from 75 emails a day to one!”
Best Practices to Win Non-profit Customers
You can win over non-profit organizations that have been let down in the past by following some simple best practices.
First, be sure you understand how salary allocation works with your HCM system. Can you allocate actual salaries across funding, or do you provide a fixed estimate? Also be sure you understand what your customer is really asking for when they mention salary allocation. Ask follow up questions that tease out the nuanced details of their salary allocation needs.
Second, ask these questions to get a good understanding of your customer’s situation early on.
- How do you manage your time capture and allocation of grants/funds for your salaried and hourly employees? Many non-profits still rely on Excel or manual time cards, which are unreliable and time consuming to manage.
- How accurate and timely are your time and effort reports to your funding sources? By relying on Excel or manual processes, often the data in the reports are “estimates” — which makes it difficult to justify in case of an audit.
- How much time is your payroll person spending on the above tasks each pay period? Retaining talent at a non-profit is another challenge. Requiring staff to spend hours on manual processes is very time consuming and demotivating.
Finally, be ready to bring in IDI early on. We understand the unique pain points that non-profits deal with and we can show your customer how IDI’s integration solution meets their salary allocation needs. Often, even the most hesitant customers are so surprised by actual salary allocations that many of their objections seem to vanish.
IDI is the partner you can count on to win more non-profit sales. Our learning center equips you with the tools and knowledge you need to close more deals with non-profit organizations. Check out the IDI Resource Center today!