Choosing Your Accounting Method: Accrual Accounting or Not

Welcome to the Accounting module!

Before you get started, some configuration is required. The first step is to choose the accounting mode you want to use. This choice will tailor the software, documents, and features to your needs.

This article explains how to:

• Choose an accounting mode
• Switch accounting modes
• Fine-tune accounting settings for each mode

👉 Download our accounting user guide (9 pages)

Choose an accounting mode

Two modes are available: Cash-basis accounting and Accrual accounting.

Cash-basis accounting

This mode gives you access to:

• Simple expenditure / revenue accounting,
• Bank reconciliation and deposit slip tools,
• Cash flow tracking: a view of your expenditures and revenues,
• A profit and loss statement generated automatically based on your entries.

Accrual accounting

In addition to everything included in cash-basis accounting, this mode gives you access to:

• Accrual accounting — meaning the distinction between accruals and payments. This lets you manage accounts payable and accounts receivable, for example,
• The full suite of accounting documents (Statement of financial position, Profit and loss, Journal, General ledger, etc.).

Not sure which mode to pick?

Each accounting mode unlocks a different set of features — but don't worry: you can always fine-tune your settings later under Settings > Accounting.

We recommend choosing a mode that matches your accounting knowledge and your nonprofit's reporting requirements. These requirements can vary depending on the size of your organization and applicable legal obligations.

Important: there is no additional cost regardless of which accounting mode you choose.

Can I switch accounting modes later?

Absolutely! It's quick and easy — and you won't lose any data.

To switch accounting modes, go to Settings > Accounting. On that page, you'll see whether the Accrual accounting option is enabled or not — this indicates your current mode.

You can then toggle the option on or off.

Please note: if you are using accrual accounting and have entries pending payment, you will not be able to switch out of accrual accounting mode.

Fine-tune the settings for your chosen accounting mode

Under Settings > Accounting, you can fine-tune these settings to tailor the accounting software to your needs. You can enable:

• Display of accounting documents (General ledger, Profit and loss, Statement of financial position, Journal, Trial balance)
• The allocation management tool for creating funds and allocating entries to them,
• Subsidiary accounting to link entries to third parties (accounts receivable, accounts payable),
• VAT entry,
• Invoice not received (INR) entry,
• Deferred revenue and prepaid expenses entry,
• Generation of the accounting entries file,
• Subsequent payment tracking — the option that lets you record the date, amount, payment method, and/or bank account for an expenditure or revenue payment.

Use the toggle on the right to enable or disable the options you want.

A green message will confirm that your changes have been saved.