When choosing an accounting system, it is important to take into consideration that there are several different types of accounting, and you will need to be able to do the type of accounting specific to your business. One type of accounting is Fund Accounting.
What is Fund Accounting and Who Uses It?
Fund Accounting emphasizes accountability as opposed to profitability. It is used by non-profit and government organizations. In this type of accounting, a fund is a self-balancing set of accounts. These must be segregated for specific purposes in accordance with laws and regulations. This is important for non-profits and government organizations because they are required to show in their financial reports how the money was spent in conjunction with a committee or board approved allocation or budget of funds.
The difference between Profit Oriented Businesses
Profit oriented businesses will typically have one General Ledger that balances in total, while companies using Fund Accounting will typically have more than one set of self balancing general accounts (ie Funds) within the greater organization. An organization using Fund Accounting typically will have to produce full financial statements such as a balance sheet, profit and loss, trial balance and statement of cash flows for each fund in the organization while a for profit company will only need to do this for once for the entire organization.
Accounting Seed integrates with Fund Accounting
Reach out to Accounting Seed by emailing us at info@accountingseed.com to discuss how we can successfully manage your company’s Fund Accountingor any other type of accounting. Request a free demo or speak to one of the elite accounting software solution providers of 2018 by calling (410) 995-8406 today.
