Adjustments Module Overview

The Adjustments Module is the place to go if you would like to add Accruals and Deferrals and to add any fund or category transfers.

Click here to view our Frequently Asked Questions relating to the Adjustments Module.

Watch this short video to learn more about the Adjustments Module:

Accruals & Deferrals

Accruals and Deferrals allow you to properly account for income and expenditure that relates to a particular financial year, but 'lands in the wrong financial year on your bank account' e.g. Gift Aid that relates to your current financial year, but isn't received into your bank account until the following financial year. 

Learn more about accruals and deferrals, also described as creditors and debtors, in this blog article.

ExpensePlus offers the following options for churches and charities accounting on an accruals basis:

Accounts Receivable 

Used where income from a financial year hits the bank account in the following financial year (e.g. Gift Aid that is still yet to be claimed from HMRC).

Accounts Payable 

Used where expenditure from a financial year hits the bank account in the following financial year (e.g. PAYE and Pension contributions typically get paid in the month after the one they relate to).

Prepayments

Used where expenditure gets paid in advance (e.g. a deposit for a weekend away venue paid in the financial year prior to when the event is taking place)

Deferred Income

Used where income is received in advance (e.g. ticket income received in the financial year prior to when the event is taking place).

Typically, organisations only add accruals and deferrals at year-end and reverse these out at the start of the next financial year; however, you can add accruals and deferrals during the financial year if you wish to, for example on a monthly basis.

Transfers between Categories

ExpensePlus allows you to split income and expenditure transactions to the correct categories when recording transactions, so this option is usually only used where you wish to 'bulk cross-charge'.

For example:

• some churches designate 10% of their income to go to a missions fund, or if you receive a grant for a particular project you are running;
• or you might wish to cross-charge £100 per month to cover some of your administration costs.

Transfers between categories show up in your income and expenditure reports and where these are between different funds. They also affect your fund balances as you would expect.

Transfers between categories can only be done between income and income categories and expenditure and expenditure categories. This is done to avoid a common issue that occurs in other accounting software, where expenditure to income category transfers are allowed, but as a result, both the income and expenditure of the organisation get artificially inflated leading to issues at year-end.

Where you are cross-charging income, you would do this by showing a positive income in the category you wished to allocate the designated amount to, and a negative income in the category it was coming from.

Find out more here: Income Category Transfers

Similarly for expenditure, a positive expenditure would show in the category paying the money to cover administration costs, and a negative expenditure would show in the category the money was originally spent from.

Find out more here: Expenditure Category Transfers

Fund-to-Fund Transfers

Fund to fund transfers are commonly used if your organisation wishes to set aside or designate money. For example:

• you may wish to have a 'reserves fund' and set aside £20k from your general fund into a separate fund, to allow the money that has been set aside for reserves to not get included in your general fund balance;
• or you may wish to start a new fund e.g. for a building project and create a fund to fund transfer to move into this fund money from another fund. 

Fund-to-fund transfers don't show up on your income and expenditure reports but do affect your fund balances, as you would expect.

Find out more here: How do I move money between funds?

Click here to view our Frequently Asked Questions relating to the Adjustments Module.