What to Ask About Allocations When Selecting Fund Accounting Software for Your Association

Here are four key areas to consider during your search and evaluation of the accounting software options. We’ll explore each of these topics in more detail in a series of blogs.

1. Fund Accounting
2. Reporting
3. Allocations
4. Budgeting and Encumbrances

We’ve previously looked at Fund Accounting and Accounting Reporting. Now we’re turning to the third key area, Allocations.

For associations, allocating shared costs accurately—across programs, departments, or revenue streams—is critical for transparency, compliance, and sound financial planning. But if you’re still relying on spreadsheets or disconnected tools, even simple allocations can become time-consuming and error-prone. The right cloud-based fund accounting software should simplify allocation processing—not add to your workload. 

Whether you manage complex dues structures, overhead costs, or indirect funding, here are key questions to consider when evaluating fund accounting software for your association: 

Allocation Capabilities to Look For: 

• What allocation methods are supported? (e.g., headcount, units, transaction counts) 
• Can the system calculate allocation percentages automatically, or do you have to manage those manually outside the system? 
• Are non-financial drivers (like member counts or FTEs) supported for transaction entry and use in allocation formulas? 
• Is there flexibility in applying different date ranges to driver data vs. pooled expenses? 
• Can allocations occur in real-time during transaction entry, and/or be applied in batch for summarized costs? 
• Is it possible to run allocations on demand, for any user-defined date range? 
• Can you align allocations with payroll cycles or other periodic processes? 
• Does the system let you include or exclude specific dimensions (e.g., fund, program, department) in each allocation rule? 
• Is indirect cost rate handling built in, for grants or other compliance needs? 
• What audit trail reports are available, and how easy is it to review allocation history? 
• Is the allocation setup intuitive, and how easily can errors be corrected if something posts incorrectly? 

Why It Matters 

Allocations aren’t just a back-office process—they directly impact how you measure program impact, report to your board, and make strategic decisions. A system that automates and documents these processes saves time, reduces risk, and gives your finance team more confidence in the numbers. 

Looking for a cloud-based fund accounting solution that makes allocations easier—without the hassle? 

Microsoft Dynamics 365 Business Central for Associations, paired with our HeadSTART for Associations implementation approach, offers built-in allocation tools and nonprofit best practices that help your association do more with fewer resources. 

Next Steps

• Check out our other blog posts on fund accounting software for associations:
  • Looking for a Cloud-Based Fund Accounting Software Solution? 
  • Looking for Cloud-Based Accounting Reporting Software? 
• Let’s connect and explore how you can modernize your finance operations—starting with allocations.