In this article
For a non-profit organisation (NPO), recording a payment is only the beginning. It also needs to know which fund the money belongs to, which project it supports and, when relevant, who provided it. Banana Accounting+ lets you add these details to the same transaction without creating a separate set of ordinary accounts for every fund, project or donor.
This helps an NPO organise the information needed for INPAS fund accounting, the analysis of expenses and fundraising cost disclosures. The software helps collect and analyse information; it does not, by itself, certify an INPAS-compliant financial report.
Segments: a financial view of each fund
Segments divide ordinary accounting transactions into separate reporting dimensions. In the INPAS templates, first-level segments such as ":Fund A", ":Fund B" and ":Fund C" identify funds. They are defined in the Accounts table and are added after an ordinary account code in the Transactions table.
Unlike cost centres, segments can be used to analyse the whole accounting structure: assets (what the NPO owns), liabilities (what it owes), income and expenses. When transactions and opening balances have been attributed consistently, Banana can produce accounting reports and balance sheets subdivided by segment. This is particularly useful for identifying resources and obligations belonging to individual funds.
Where can a segment be entered in double-entry accounting?
A segment may be assigned to the Debit account, the Credit account, or both:
Credit only:
Debit: "Bank"
Credit: "Grants restricted Project 1:Fund A".
The grant income is assigned to Fund A, but the bank asset is not.
Debit only:
Debit: "Bank:Fund A"
Credit: "Grants restricted Project 1".
The bank asset is assigned to Fund A, but the grant income is not.
Both sides:
Debit: "Bank:Fund A"
Credit: "Grants restricted Project 1:Fund A".
Both the asset and the income are assigned to Fund A.
This is generally the more useful approach when a complete financial report by fund is needed.
Important: if the same segment is entered on both sides, its individual segment card can show a zero balance because debit and credit offset one another. This does not mean the fund has no money or no income. Use the report subdivided by segment to examine assets, liabilities, income and expenses separately. A segment used on only one side gives a partial view, not a complete fund balance sheet.
Segments in Income & Expense accounting
In the Transactions table, the segment can be appended to either of these columns:
Account only:
- Account: "Bank:Fund A"
- Category: "Grants restricted Project 1".
This attributes the bank movement to Fund A.
Category only:
- Account: "Bank"
- Category: "Grants restricted Project 1:Fund A".
This attributes the grant income to Fund A. It is the approach used for ordinary income and expense examples in the INPAS Income & Expense template.
If the segment is added to both Account and Category, the movement can appear twice in the segment card. For this reason, the segment-card total must not be mistaken for the fund balance. In more complex accrual adjustments, the NPO must check the individual account/category positions and reconcile the fund separately. In an Income & Expense transaction, Category can also contain a balance-sheet account, for example when recording a grant advance as a liability.
Cost and profit centres: detailed analysis of projects, activities and donors
Cost and profit centres are independent analytical classifications. Banana has three independent columns, CC1, CC2 and CC3, each of which can contain any number of centres:
- CC1: codes defined with a leading dot, such as ".Campaign 1".
- CC2: codes defined with a leading comma, such as ",Project 1".
- CC3: codes defined with a leading semicolon, such as ";Benjamin Foster".
In the Transactions table, enter the code without its leading dot, comma or semicolon. The INPAS templates use CC2 for projects and CC3 for donors. CC1 remains available for another analytical purpose, such as an event or campaign.
Using positive and negative entries
A cost or profit centre can record positive or negative amounts independently of the ordinary accounting entries. This allows the organisation to add or subtract amounts from a project or donor's analytical balance, depending on the reporting purpose.
- Enter "Project 1" in CC2 to add the transaction amount to that centre.
- Enter "-Project 1" in CC2 to subtract the amount from that centre.
For example, if you decide that a project centre should show income minus expenses:
- A grant of EUR 1,000: CC2: "Project 1" adds EUR 1,000.
- A project expense of EUR 300: "CC2: -Project 1" subtracts EUR 300.
The analytical centre then shows EUR 700.
You can use the opposite convention if you want to monitor net costs instead. The sign is not automatically determined by whether the ordinary transaction is income or an expense. Apply a consistent convention. In Income & Expense accounting, an optional setting can make cost-centre signs follow categories; enable it only when that matches the intended analysis. A donor centre can similarly record receipts and, with the opposite sign, refunds or corrections.
A cost/profit-centre card is not a complete balance sheet or an automatically generated statutory Income Statement. It shows the movements you assigned to that centre. If you use it exclusively for income and expenses with consistent signs, it gives a useful project-level income-and-expense analysis. If you also assign advances or balance-sheet transfers, the total will not represent the project's operating surplus.
Supporting INPAS expense and fundraising disclosures
Ordinary expense accounts support the required analysis in the Statement of Income and Expenses, while cost/profit centres give an additional operational breakdown. For example, a centre for a fundraising campaign can collect the costs associated with that activity, and a project centre can collect the project's income and expenses. INPAS requires an appropriate expense analysis in the Income Statement; an internal cost-centre card does not replace it.
Under INPAS, fundraising costs may need to be reported by donation and grant fundraising, commercial/trading activities and investment management, including relevant direct, shared and support costs. Banana's accounts and analytical centres help identify the underlying entries, but allocation methods and the required gross disclosures must still be prepared and documented.
One transaction, three dimensions of information
Suppose Benjamin Foster donates EUR 1,000 for Project 1 within restricted Fund A. In a single double-entry transaction you can record:
- Debit account: Bank:Fund A
- Credit account: Grants restricted Project 1:Fund A
- Amount: 1000.00
- CC2 (project): Project 1
- CC3 (donor): Benjamin Foster
- CC1 (optional campaign): an appropriate campaign code, if configured
One transaction updates the ordinary accounts, identifies the fund, links the receipt to the project and associates it with the donor. These dimensions are independent: a project can use more than one fund, and a fund can finance more than one project. The NPO can add detail without multiplying its ordinary ledger accounts.
Generate donation statements for donors
Banana Accounting+ also helps non-profit organisations simplify donor administration by generating personalised donation statements directly from their accounting records.
With the Donation statement for Associations (Banana+) extension, an NPO can:
- Generate individual donation statements for a selected donor or multiple donors.
- Automatically calculate the total donations received during a selected period.
- Include the details of individual donation transactions.
- Personalise the statements with the organisation's logo, donor information and signature.
- Print or save the statements as PDF documents, which donors may use for tax purposes where permitted by applicable legislation.
Donors must be configured as CC3 cost centres in the accounting file to use this donation statement extension. This is already the structure used in the INPAS templates.
By assigning each donation to the appropriate donor in CC3, the association can reuse the same accounting information for donor tracking, financial analysis and the preparation of donation statements, avoiding duplicate data entry.
The availability of tax deductions and the legal requirements for donation certificates depend on the country and the tax status of the organisation. Banana generates the document but does not determine its fiscal validity.
How to view the results
- Cost/profit-centre card: from Reports > Account/Category cards, select Cost centres to view the movements and analytical balance of a centre. The grouped totals are also visible in the appropriate Accounts or Categories section.
- Segment card: open the segment's account card to inspect the entries carrying that segment. Remember that its net movement may be zero or may include duplicated amounts, depending on how the transaction was classified.
- Report by segment: use Reports > Accounting Report or Enhanced Balance Sheet by Groups, then activate Subdivision by Segment. This is the appropriate way to examine the related assets, liabilities, income and expenses separately.
What Banana helps achieve under INPAS
Banana Accounting+ helps non-profit organisations manage their accounting, monitor restricted funds, analyse projects, track donations and organise the financial information needed for INPAS reporting.
By combining segments, cost and profit centres, standard accounting reports and available extensions, organisations can:
- Maintain detailed accounting records without unnecessarily expanding the chart of accounts.
- Monitor multiple funds, projects and donors within the same accounting file.
- Generate standard financial statements and accounting reports directly in Banana.
- Track fund movements and transfers between funds, providing the information needed for fund reconciliations.
- Analyse project income, expenses and fundraising costs.
- Prepare financial information for INPAS statements and numerical schedules.
- Generate personalised donation statements for donors, including documents that may be used for tax purposes where permitted by applicable legislation.
This integrated approach reduces manual work, avoids repeated data entry and maintains detailed financial information that can be reviewed at any time.
Preparing INPAS-compliant financial statements may require additional reporting tools and adjustments. Full compliance also depends on the correct application of the standard, comparative information, explanatory notes, the Narrative Report and a review of the financial statements by the organisation.