Hi!

Our agency is using both the FE & RE, but it is not integrated yet. We are thinking of doing it in the near future. Can we have feedbacks how successful/helpful if by doing so or if it is a bad idea? Is it a lot of work to begin with? We want to hear the pros and cons. If there is an agency from Los Angeles, CA who have a successful FE & RE integration can we get in touch with you? Thanks a lot.

Hi Zandra - I can tell you from many experiences, that integration is a great idea.  Basically, it elminates the double entry of gift and pledge transactions from RE to FE.  Plus, you also get the ability to drill down from a posted transaction in FE back to the source document in RE.  It makes doing gift transaction research much much easier.  Integration gives you timely data not only for cash gifts, but also for pledges and pledge payments.  It makes reconciling FE and RE a much simpler process.

 As for how much work is involved depends on how FE and RE are currently configured.  Hopefully you have Projects Grants & Endowments (PGE) in FE.  PGE is not required to integrate FE & RE, but it does make it easier.  The basic setup is for every RE Fund you have, you have a corresponding FE Project.  That allows you to post and report all gift transaction by type, specifically, Cash, Pledge, Stock, In-Kind and Other with Other being defined by the organization.  This allows FE to report contributions based on the type received.  For example, showing your board that you have $1,000,000 of contributions is great.  What is more valuable to know is that of that amount, $100,000 is cash that can be spent immediately versus the remaining $900,000 that won't be paid for another 10 years.

 There are some cons to integration, one of the biggest is that fact that changes made to gifts in RE will post thru to FE, which you would want to do.  The "gotcha" is the GL post date that is used.  Gifts received in the past that are changed after they are posted to FE will cause an adjustment transaction to post, generally using the original gift date as the GL post date, which is the default functionality of RE.  The user has the ability to override that date, but then you are dependent upon someone outside of finance to decided the correct GL post date.  Good procedure documentation and training generally can overcome post dat issues.

Another con is RE and FE need to be reconciled in order to get accurate reporting.  You would be amazed at the number of organizations that either do not reconcile RE and FE at all or at a minimum, only do it at year end for audit.  Reconciliations should be done every month, integrated or not.  Integration merely forces the issue.  It's a best practice that not everyone does.  The most challenging reconciliation will be the outstanding pledge receivables.

If you have worked with RE for a time, you probably know that reporting can be a tricky process.  I guess I should say, reporting from both RE and FE that give you the same numbers is the real trick.  Again, good procedures, report documentation and training can solve that issue for you.

 Overall, inegration is a very good thing and will really leverage your investment in both systems.  If you need any help, or have any questions, don't hesitate to give me a call.  Hope this information helps. - George

Thanks a lot for this info George.