# Accounting
The Accounting module lets your church track income and expenses using a double-entry bookkeeping system. It connects directly to your Giving records and supports bank account management, budgeting, check writing, and bank reconciliation depending on your setup level.
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## Getting Started
When you first open Accounting, a setup wizard will walk you through five steps:
1. **Choose a mode** — Simple (income and expenses only), Standard (adds budget, vendors, and checks), or Full (adds account codes, draft workflows, and period locking).
2. **Build your Chart of Accounts** — Add the categories you'll use to track money. See below for the two ways to do this.
3. **Add bank accounts** — Enter the names of your checking and savings accounts. You can also add money market accounts, certificates of deposit (CDs), and credit cards. A CD is tracked like any other bank account — it appears in reconciliation and opening balances — but you cannot write checks from it or record deposits into it. When the CD matures or pays interest, record that with a journal entry.
4. **Set opening balances** — Enter bank balances and any amounts that were already donor restricted as of your start date.
5. **Set up fiscal periods** — Choose which calendar year to activate monthly periods for.
You can return to setup at any time to add more bank accounts or adjust balances.
### Building your Chart of Accounts
Step 2 gives you two ways to set up accounts, and you can mix both:
- **Suggested accounts** — A starter list based on your chosen mode. Check the ones you want and click **Add selected**. This list stays available until you import a CSV of your own (see below).
- **Import from CSV** — If your church already keeps its own chart of accounts (for example, exported from another system or from a spreadsheet your treasurer maintains), upload it instead of picking from the suggestions.
- Required columns: **name** and **type** (Asset, Liability, Revenue, Expense, or Net Assets). Add **code** too if your book uses account codes.
- Optional **parent_code** column groups an account under another row in the same file — list the parent row before its sub-accounts.
- Optional **restricted**, **tax_deductible**, and **giving_category** columns (yes/no, true/false, or 1/0) let you flag donor-restricted revenue, whether a gift counts on giving statements, and whether an account shows up when entering offerings. For a liability account, marking it a giving category makes it a **pass-through account** — money the church collects and forwards elsewhere, like a scholarship remitted to a college. The gift is still a contribution to the church, so it can still be reportable and tax deductible.
- If your file already lists the matching **Net Assets With Donor Restrictions** fund for a restricted revenue account (which it usually will, since a full chart of accounts includes both), add its code in an optional **restricted_net_asset_code** column so NazTrack links to that existing row instead of creating a new one. Leave it blank and NazTrack will create the linked fund account for you automatically.
- A row that has other rows underneath it (referenced by their **parent_code**) is treated as a grouping heading, like "Revenue" or "Designated Offerings" — it won't automatically be marked a giving category just because of its type.
- Column names from NazTrack's own Chart of Accounts export ("GL Code", "Account Name", "NazTrack Type", "Parent Code") are recognized automatically, so you can re-import a file you exported earlier.
- Once you import a CSV, NazTrack stops suggesting the generic starter accounts — your imported accounts become the primary list. You can edit or delete any of them, or add more (by CSV or one at a time), right from this same screen before moving on. Deleting only works for accounts that haven't been used in a transaction yet; once an account has activity, use the Active/Inactive switch on the Chart of Accounts page instead.
- If a row in your file has a problem (an unknown type, a missing name, a parent that isn't in the file), that one row is skipped and reported — the rest of the file still imports.
Once setup is finished, the ongoing **Chart of Accounts** page organizes your accounts into tabs — Asset, Liability, Net Assets, Revenue, and Expense — each showing how many accounts it holds, so you can jump straight to the section you need instead of scrolling one long list. The **Add Account** form is collapsed by default; click it to expand and add a new account.
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## Opening Balances
When moving from another accounting system, enter the balances of your bank, asset, and liability accounts as of the migration date. Bank accounts get their own balance field. Any other asset (like prepaid insurance or a note receivable) or liability (like accounts payable, or a scholarship the church is holding to pass through) shows up in its own **Other Asset Balances** / **Liability Balances** section — anything that isn't a revenue or expense account can carry an opening balance. Also enter each existing donor-restricted balance, such as Building Fund, Children's Ministry, or Youth Ministry. Step 4 lets you create as many named restricted funds as needed and assign a separate opening balance to each.
Restricted balances are classifications within your existing assets; they are not additional cash. NazTrack posts each restricted amount to its matching **Net Assets With Donor Restrictions** account and assigns the remaining net assets to **Net Assets Without Donor Restrictions**.
Older NazTrack books may contain an inactive **Legacy Opening Balance Clearing** account. Migration reclassifies that balance into Net Assets Without Donor Restrictions while preserving the original opening entry and a separate audit-trail entry.
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## Accounting Modes
| Feature | Simple | Standard | Full |
|---|---|---|---|
| Income & expense categories | Yes | Yes | Yes |
| Budgeting | — | Yes | Yes |
| Vendors | — | Yes | Yes |
| Check writing | — | Yes | Yes |
| Account codes | — | — | Yes |
| Draft/post workflow | — | — | Yes |
| Period locking | — | — | Yes |
| Fund tracking | — | — | Yes |
| GAAP-compliant reports | — | — | Yes |
You can change the mode later in Accounting Settings. Moving to a higher mode adds features; moving to a lower mode preserves your data but hides features you haven't customized.
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## Recording Transactions
Use the **Transactions** screen to record money coming in, going out, or transferring between accounts.
- **Money In** — Record income (offerings, donations, event fees) and assign it to a revenue category.
- **Money Out** — Record expenses (utilities, supplies, compensation) and assign them to an expense category.
- **Transfer** — Move money between two of your bank accounts.
In Standard or Full mode, transactions go through a **draft → post** workflow if draft workflows are enabled. In Simple mode, transactions are posted immediately.
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## Giving Categories
When you enter an offering, each split is assigned to a **giving category** — the account that receives the money. On the **Chart of Accounts** page, each revenue and liability account has a **Giving category** switch that controls whether it appears in that list.
- **Revenue accounts** are the usual giving categories: tithes, offerings, and designated funds that are income to the church. New revenue accounts are giving categories by default.
- **Liability accounts** can also be giving categories for **pass-through gifts** — money the church collects on behalf of someone else and forwards on, which is never the church's income. For example, gifts to a scholarship the church remits to a college can be received into a liability like *Powers Scholarship Payable*. When you record the gift, the money increases that liability instead of revenue; when the church sends it on, that payment reduces the liability. Liability accounts are **not** giving categories by default — turn the switch on for the specific pass-through accounts you need.
Because the gift is legally made to the church (which then chooses to pass it through), a pass-through category can still be marked **Reportable** and **Tax deductible**, so it counts toward the donor's year-end giving statement just like an ordinary contribution.
Turning a category off hides it from new offerings but leaves past transactions unchanged.
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## Donor-Restricted Gifts
A donor-restricted gift is contribution income, not a liability merely because the donor limited its purpose or timing. NazTrack records the full gift as contribution revenue and tracks the unspent restriction under **Net Assets With Donor Restrictions**.
When creating a giving revenue account, mark it **Restricted** and select the appropriate **Net assets with donor restrictions** account. NazTrack automatically classifies gifts posted to that account.
When writing a check that satisfies the donor's restriction, select the matching **Donor Restriction** on the expense line. NazTrack records the expense normally and releases that amount from donor restrictions.
Use a liability instead only when the church actually owes or may need to return the money, such as a conditional/refundable advance or money held for another organization.
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## Budget
*(Standard and Full modes)*
Create an annual budget by assigning amounts to expense and revenue categories. Once approved, the budget tracks actual vs. planned spending throughout the year. Budget amendments can be submitted and approved to adjust line amounts mid-year.
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## Checks
*(Standard and Full modes)*
Write checks against your bank accounts. Each check records the payee, date, and what the money was spent on. The check amount is simply the total of the expense lines — you don't enter it separately.
**Vendors save typing.** If you pick a vendor in the **Pay To** box, the payee name fills in automatically, and if the vendor has a default expense account (set on the Vendors page), the first expense line fills in too. Both stay editable — the vendor just gives you a head start.
**Most checks need one line.** The form starts with a single expense line: choose the account, enter the amount, done. If one check covers several things (say, a hardware store run split between Building Repairs and Office Supplies), click **Split across multiple accounts** to add lines. The running total and the amount written out in words update as you type.
**Two columns you may or may not see:**
- **Function** *(Full mode only)* — the nonprofit reporting classification (Program, Management and General, or Fundraising) used by the Statement of Functional Expenses. Each line normally inherits its account's default, so you can leave it alone; override it only when a specific payment belongs to a different function than usual.
- **Donor Restriction** *(only shown when your book has donor-restricted funds)* — choose a restricted fund when the check spends money donors gave for that purpose (for example, paying a contractor from the Building Fund). NazTrack records the expense normally *and* releases that amount from the restricted fund, so your fund balances stay accurate. Leave it at **None** for ordinary operating expenses.
Checks can be saved as drafts, then printed and issued — issuing creates the journal entry. Void a check if it was lost or cancelled.
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## Reports
The Reports screen lists all available financial reports for your accounting book.
### Simple and Standard mode
- **Income & Expenses** — Total revenue and expenses for a date range.
- **Trial Balance** — All account balances as of a given date.
- **Balance Sheet** — Assets, liabilities, and net assets as of a given date.
- **Cash Flow** — Net change in each bank account for a period.
- **Donor-Restricted Net Assets** — Balances in restricted net asset accounts.
- **Budget vs. Actual** — Compares approved budget lines to actual spending.
- **Check Register** — History of checks written.
- **Board Report** — Monthly summary for board members.
### Full mode — GAAP-compliant reports
Full mode generates reports that meet the requirements of FASB ASC 958, the accounting standard for non-profit organizations.
- **Statement of Activities** — Replaces the Income & Expenses report. Shows revenue and expenses split into two columns: *Without Donor Restrictions* and *With Donor Restrictions*. Includes a line for net assets released from restrictions.
The account's *Restricted* setting is the default for new transactions. Full journal entry lines can override that default, so one revenue account may contain both restricted and unrestricted activity. NazTrack snapshots the choice on the posted line so later account-setting changes do not rewrite prior reports.
- **Statement of Financial Position** — Replaces the Balance Sheet report. Uses the FASB-standard terminology for non-profit entities.
- **Statement of Cash Flows** — Replaces the Cash Flow report. Organizes cash movements into three GAAP sections: Operating Activities, Investing Activities, and Financing Activities. Accounts must have a **Cash Flow Category** assigned in the Chart of Accounts for them to appear in the correct section. If any balance sheet accounts with activity are missing a category, an orange warning banner will appear at the top of the report listing the affected accounts.
- **Statement of Functional Expenses** — A report required by GAAP for non-profits. Shows expenses organized by both natural category and functional class. It is available in Standard and Full modes. The account's **Functional Class** is the default, and journal/check lines can override it to allocate shared costs across Program, Management & General, and Fundraising.
### Assigning functional classes and cash flow categories
To get the most accurate GAAP reports, assign defaults in the **Chart of Accounts** screen and override them on individual journal or check lines when an allocation is needed:
- **Expense accounts** — Select a **Functional Class**: Program (ministry activities), Management and General (administrative overhead), or Fundraising (collection/fundraising costs). Most church expenses fall under Program.
- **Asset or Liability accounts** — Select a **Cash Flow Category**: Investing (long-term assets like property and equipment), Financing (long-term debt like mortgage), or Operating (working capital items like accounts payable).
- **Net Assets accounts with donor restrictions** — Optionally select a **Restriction Type**: Time, Purpose, or Perpetual.
Accounts seeded from the standard church template already have these classifications filled in.
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## Bank Reconciliation
Match your bank statement transactions against the entries in NazTrack. When all cleared items match and the difference is zero, mark the reconciliation complete. Reconciled lines are locked from further edits.
If you need to correct a completed reconciliation, click **Reopen** on the reconciliation detail page (requires the Reconcile Bank Accounts permission). Reopening returns it to In Progress so you can unmatch and re-match transactions before completing it again.
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## Vendors
*(Standard and Full modes)*
Maintain a list of vendors (contractors, utilities, suppliers) with contact information and default expense categories. When writing a check, selecting a vendor fills in the payee name and category automatically.
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## Fiscal Periods
Fiscal periods represent monthly accounting periods within a year. In Full mode, you can close a period to prevent additional entries from being posted to it. Closed periods can be reopened by a user with the **Lock Fiscal Periods** permission.
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## Permissions
| Permission | What it allows |
|---|---|
| View Accounting | Read-only access to all accounting screens |
| Enter Transactions | Create draft journal entries, checks, and deposit batches |
| Post Transactions | Move drafts to posted status |
| Void Transactions | Void posted entries |
| Manage Checks | Create, edit, print, and void checks |
| Reconcile Bank Accounts | Perform bank reconciliation |
| Manage Budget | Create and edit budgets and amendments |
| Approve Budget | Approve budgets and amendments |
| Manage Vendors | Create and edit vendor records |
| Lock Fiscal Periods | Close or reopen fiscal periods |
| Manage Chart of Accounts | Create and deactivate ledger accounts |
| Manage Accounting Settings | Configure bank accounts and book settings |
The **Treasurer** system role includes all Accounting permissions by default.