32 lines
1.6 KiB
Markdown
32 lines
1.6 KiB
Markdown
# Non-Profit Workflow
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<a id="workflow-dictated"></a>
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Many accounting systems seem to assume that the workflow fits a certain type
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of uses. While the ability to impose a specific workflow (e.g., for a
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bookkeeper who might make an error easily if the system doesn't require a
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workflow), the workflow should not be dictated.
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<a id="workflow-configurable"></a> Ideally, in fact workflows should be
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configurable in some way. Many systems try to do this and are a bit
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constraining on it.
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## <a id="unaccrued-invoice"></a>The "Unaccrued Invoice" Example
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The easiest example I have of this relates to accruing income upon invoice
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generation. Non-profits very typically generate invoices as part of a
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fundraising discussion *even though* the non-profit doesn't have a good faith
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belief that the invoice will be paid. Using an invoice to convince a donor
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to make a donation is, in essence, just a fundraising strategy to pressure
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for them to commit to a donation that the donor has hinted they might make.
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Under GAAP, these invoices should **not** be accrued nor recognized, because
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the organization doesn't have a good faith belief that the income is
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forthcoming.
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Many accounting systems assume that the user would never possibly generate an
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invoice without realizing the income immediately. In most for-profit setups,
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this is true, but for non-profits, there is good reason to generate invoices
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before accruing the income. In fact, if you're generating an invoice merely
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to "inspire" a donation, it's wrong to accrue that, since you don't have a
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good faith belief that the invoice will be paid.
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