Nonprofits have an invoicing problem that commercial businesses do not: most of your incoming money is not an invoice at all.<\/p>\n
Donations, grants and membership subscriptions are receipts, not sales. Only part of your income \u2014 service contracts, room hire, training, trading activity \u2014 behaves like ordinary invoicing. Choosing software that treats everything as a sale produces accounts your treasurer cannot reconcile and a board report that means nothing.<\/p>\n
This decides which software you need, and getting it wrong causes months of cleanup.<\/p>\n
Donations.<\/strong> Not invoiced. They need receipting, donor records and \u2014 in many jurisdictions \u2014 tax documentation. This is a fundraising system’s job, not an invoicing system’s.<\/p>\n Grants.<\/strong> Usually paid against a funding agreement with milestones and restricted purposes, often requiring drawdown requests rather than invoices. Restricted funds must be tracked separately.<\/p>\n Memberships.<\/strong> Recurring, sometimes part-donation and part-benefit, which affects tax treatment.<\/p>\n Trading income.<\/strong> Genuine invoicing \u2014 consultancy, training, venue hire, sponsorship. This is where invoicing software applies.<\/p>\n Most small charities need receipting and fund accounting<\/em> plus modest invoicing<\/em>, and buy invoicing software expecting it to handle the first two.<\/p>\n Xero<\/strong> with tracking categories, or QuickBooks<\/strong> with classes, approximates restricted fund reporting and handles invoicing properly. Both have nonprofit discount routes \u2014 often through TechSoup rather than directly.<\/p>\n Adequate if you hold a small number of restricted funds. It strains with many funds, multi-year grants or a demanding independent examiner.<\/p>\n Sage Intacct<\/strong> and Aplos<\/strong> handle genuine fund accounting natively, with Aplos aimed specifically at nonprofits and churches at a smaller scale.<\/p>\n Donorbox<\/strong>, Givebutter<\/strong> and Zeffy<\/strong> handle donations and receipting. Zeffy is notable for a zero-platform-fee model funded by optional donor tips \u2014 worth checking against your circumstances.<\/p>\n Beacon<\/strong>, Salesforce Nonprofit Cloud<\/strong> and Bloomerang<\/strong> combine donor CRM with fundraising. Salesforce offers donated licences to eligible nonprofits, though implementation is a project.<\/p>\n These record income. They are not accounting systems, and the two must reconcile.<\/p>\n Zoho Invoice<\/strong> has historically been free for small organisations. Wave<\/strong> has offered free core invoicing. Both are sufficient for modest trading income alongside a proper accounting system.<\/p>\nThe Options<\/h2>\n
Accounting with fund tracking<\/h3>\n
Donation and CRM platforms<\/h3>\n
Straightforward invoicing<\/h3>\n
How They Compare<\/h2>\n