Typically when many non-profits configure Dynamics SL for their organizations, they configure accounts as gl accounts, subaccounts as divisions, departments or locations and then projects as, well, projects.
One of our consultants, Bud Brenneman, successfully worked with a client on a different approach. The organization is Community Action Partnership of Ramsey & Washington Counties here in the Twin Cities of Minneapolis and St. Paul. Together we were able to be creative in coming up with a better way to earmark and preserve money for what their donors originally intended.
By configuring projects as funds, the organization is able to better track and “quarantine” money meant for a specific purpose so that it does not get spent on something that the donor did not intend the money to be used for. Not all cash can be deposited into the general fund if a donor attaches strings to the gift. In addition, tasks were set up to track programs that are funded by a particular donor.
We also set up Account Categories within the Project “Fund” that were similar to the GL accounts. This gives the client the opportunity to give operating people accounts in their terminology yet it will still correlate to the GL accounts used by the accounting staff.
“Projects as Funding Sources” also allows for summarization where the operating people do not need as much detail as is maintained in the general ledger. Finally, we setup sub-accounts that were consistent with the Tasks “Programs”. This allows the client to create a GL budget that corresponds to the budget of Project “Fund”.
The other benefit to setting up projects as funding sources is that the project entity in Dynamics SL is often expecting something that lasts longer than a year-just like a gift. P&L accounts in the general ledger get zeroed out to retained earnings at the end of the year, making the project itself a better vehicle for tracking the funding sources as well.
Hopefully this simple idea will help you consider setting up Dynamics SL differently if you’ve bought it recently to show how the donor’s money is being used yet consistent with how information is captured in the General Ledger.