A key part of establishing the accounting system is determining what general ledger accounts will be used. By accounts, we mean the asset, liability, income and expense categories. It is best to establish enough categories to properly allocate and distinguish items so as to easily generate reports, but not in so much detail as to be onerous. There is s a sample Chart of Accounts in the Resource Section below.
Another important consideration when setting up the general ledger chart of accounts is the categories used in the annual charity report (form T3010A) which is submitted to Canada Revenue Agency (CRA) as well as the designations used by the FMCiC in its remittance form. It makes the job easier if the accounts match those used in reports to the government and the FMCiC.
Where practical, it is recommended that the accounting system be computerized. This makes the financial recording, reporting and production of charitable receipts much easier. There are several simple yet inexpensive software programs that are suitable including: Membership Plus/Money Counts, Power Church Plus, Quick Books and Simply Accounting.
If a manual system is used, a ledger record with enough columns will be required to record income and expenses by categories.