What should I set as the category type?
When creating categories, you will need to set a category type. This category type determines which section on the Statement of Financial Activities (SOFA) Report any transactions coded to this category will appear against.
Income Category Types
- Donations & Legacies - commonly, you'll want to use this for all income categories relating to donations, gifts and gift aid (see notes below)
- Investment Income - commonly, this is only used for the category relating to bank interest received (see notes below)
- Charitable Activities - commonly, this is used for all other non-donation income categories, such as event income and bookshop sales, etc. (see notes below)
- Trading Activities - Most organisations using ExpensePlus do not use this category type unless as a business, which is outside the organisation's charitable activities
Additional Notes:
- Grants can fall into either 'Donations & Legacies', if they relate to core funding, or 'Charitable activity', if they do not.
- Letting Income will usually be within 'charitable activities' for non-investment properties (e.g. church hall hire), or 'Investment Income', for where it comes from an investment property (e.g. a house rented out to generate income'). It is possible to also be 'Trading Activities' and your auditor or independent examiner will advise accordingly.
- Sponsorship, where it is considered to be a donation, will fall in 'Donations & Legacies', but otherwise will usually fall within 'Charitable activity' (where it relates to an activity that is part of the organisation's charitable objectives), or 'Trading Activity' (where it is not).
Expenditure Category Types
- Charitable Activities - commonly, this will be the correct category type for nearly all expenditure categories
- Raising of Funds - this category is for where money has been spent in order to raise money for the organisation e.g. the cost of a media advertising appeal, from which you hope people will give to your organisation in order for you to raise funds. Most organisations using ExpensePlus do not use this category type
You can change a category type within the Income and Expenditure categories settings screen.
If you have any questions about category types that should be used, we recommend that you check this with your independent examiner.