Over the years, we’ve become familiar with the challenges faced by departments, centers, and schools within the nation’s top research funded universities, as well as research hospitals and other institutions.
When it comes to effective grant accounting, one of the most significant challenges is reconciling accounts on a regular basis. This is necessary to manage sponsored funds to ensure that expenditures and revenues are within appropriate budget limits and guidelines. The typical features of a general ledger usually can’t handle this level of detail.
Administrators also need to easily generate financial reports to meet federal mandates, manage personnel costs, and provide to principal investigators. Again, the general ledger can’t easily facilitate such tasks.
The best approach for effective grant accounting
As research funds become more competitive to obtain, and as standalone systems and manual spreadsheets become cumbersome, the grant accounting process has never been more demanding at most central offices of Sponsored Research Administration. That’s why in most cases, a specialized grants accounting software system is the best approach.
Using a grant accounting solution to monitor sponsored accounts helps to ascertain that the appropriate amount of revenue has been received. This solution also helps confirm the availability of project funds as needed.
Grant accounting systems can help ensure that costs are consistent with the project schedule and incurred between the start and end dates of the project.
It’s also easier to discover any budget, encumbrance, or expenditure discrepancies and whether an end user, a service department, or a system-generated problem causes these. A clear audit trail for the future is also part of the features provided.
In all the cases we’ve seen, grant accounting software make a difference in grant management operations. Teams gain access to superior reporting, maintain budgets and balances for multi-year projects, and streamline the process to calculate and encumber projected personnel costs. They also appreciate the ability to easily calculate F&A costs, support for multiple corporate entities, and user defined coding systems for tracking special commitments.
In terms of integration, it’s straightforward to supplement general ledger transaction information with additional information to create a comprehensive post-award management platform. General ledger transactions can be electronically populated via an interface to an existing system or manually entered.
Effective grant accounting within reach
In all, a specialized grant accounting solution gives the principal investigator confidence that the project is in compliance with the sponsor’s spending terms and conditions.
Note that a specialized grant accounting solution does not replace general ledger systems. Instead, it is designed to interface with and supplement them to provide a comprehensive research and financial management system that addresses researchers’ unique needs.
For effective grant accounting at your research institution, contact our team to learn more about putting this approach in place.
