[Calendula-devel] Accounting software

[Brian Roberg]

On Wed, Mar 31, 2004 at 01:49:31PM -0500, Peter Hollings wrote:
> Many non-profits have a fundamental difference in their accounting
> methods from commercial enterprises.  They do something called "fund
> accounting". Basically, what this means is that they set aside some
> funds earmarked for specific purposes (such as an university endowment
> for scholarships) and then they account for the income and expenditure
> of the fund. This is in addition from the organization's "general
> accounting". 

I'm glad you mention this, because it highlights the uncertainty and
frustration that we (a small non-profit organization) have faced with
respect to accounting software.

When I went to the Christian Management Association conference last year, I
heard all about "fund accounting" and was concerned because our software
wasn't geared to do that.  But I'm a sysadmin, not an accountant, so I
didn't understand what everything meant.  In fact, like most non-profits our
size (I'd imagine), we don't have a full-time accountant.  Thus none of us
understand these accounting terms with any real precision.  We just get by
doing what we need to do.

In fact, I've had trouble understanding what exactly makes fund accounting
qualitatively different from what a for-profit company would use.  By the
definition you provided, we do fund accounting.  But some accountant-types
who've worked with us say what we're doing is not fund accounting.

Jason was expressing the tentative conclusion we've reached, namely that
people with formal training in accounting look for very particular things
when they evaluate accounting software.  For example, one of the guys who
helped us last summer has a Master's degree in accounting. He said that
GNUCash wasn't suitable for use because it doesn't have a "Chart of
Accounts." He's right that it doesn't have a button that says "Chart of
Accounts." But it does let you organize accounts hierarchically, manage
amounts for each independently, assign codes for each account, etc. The
capability is there, but the presentation of the data is not what an
accountant would expect.

True, it would be better if we had a system that presented things using the
same terminology as the regulations we're trying to follow.  But we don't
have the money to buy such a system, and if GNUCash can do the same thing
(if not using the right words), we'll go with that.

If anyone is an expert in both accounting and GNUCash, I would love to know
whether our assessment is accurate.

> Since many NPOs operate on grants, you might also consider what kind of
> financial recordkeeping/report making would be required.  

Definitely.  This is very important.

Brian
-- 
Brian Roberg
DiscipleMakers, Inc.
W: 814-234-7975x34  H: 814-867-8327
http://www.brianroberg.org/