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, the first-level segments :Fund A, :Fund B and :Fund C identify restricted funds, while :General identifies the unrestricted General Fund.

These segments are defined in the Accounts table and are added after an ordinary account code in the Transactions table.

The General Fund contains resources that are not subject to restrictions requiring them to be held in a separate restricted fund. Using :General allows the organisation to analyse general activities alongside restricted funds, without creating a separate chart of accounts for each fund.

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 account: "Bank".
• Credit account: "Grants restricted Project 1:Fund A".

The grant income is assigned to Fund A, but the bank asset is not.

Debit only: 

• Debit Account: "Bank:Fund A".
• Credit Account: "Grants restricted Project 1".

The bank asset is assigned to Fund A, but the grant income is not.

Both sides:

• Debit account: "Bank:Fund A".
• Credit account: "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, but does not attribute the corresponding bank asset to that fund.

In the INPAS Income & Expense templates, the segment is generally entered in both the Account and Category columns when both positions belong to the same fund. This allows the organisation to track assets, liabilities, income and expenses by fund more completely.

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 want a project centre to show income minus expenses, the INPAS tutorial includes the following transactions:

A restricted donation of EUR 727 for Project 1, recorded on 10 January 2026:

• CC2: Project 1 adds EUR 727.

A project expense of EUR 307, recorded on 12 January 2026:

• CC2: -Project 1 subtracts EUR 307.

For these two transactions, the analytical centre shows a positive result of EUR 420.

As additional income and expenses are recorded during the year, the project centre is updated automatically. This makes it possible to monitor the financial result of a project without creating separate ordinary accounts for every activity.

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

On 10 January 2026, the association receives a restricted donation of EUR 727 from Benjamin Foster for Project 1 within Fund A.

In the Double-entry accounting tutorial, the transaction is recorded as follows:

• Date: 2026-01-10
• Description: Restricted school fund donation month 1
• Debit account: Bank:Fund A
• Credit account: Grants restricted Project 1:Fund A
• Amount: 727.00
• CC2 (project): Project 1
• CC3 (donor): Benjamin Foster

One transaction updates the ordinary accounts, identifies the restricted fund, links the donation to the project and associates the receipt with the donor.

The same principle applies to the unrestricted General Fund using the segment :General.

These dimensions are independent: a project can use more than one fund, and a fund can finance more than one project. This allows an NPO to maintain detailed information without unnecessarily multiplying its ordinary accounting 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.

A restricted fund contains resources that must be used for a specified purpose under the relevant INPAS criteria. A fund is not necessarily a separate bank account, and it is not the same thing as a project or a donor. With Banana Accounting+, you can use segments to identify funds, cost centres to monitor projects and donor centres to track individual contributors, all within the same accounting entries.

This guide uses illustrative examples from the INPAS Banana templates. The amounts are in EUR, and opening balances are assumed to be zero.

First, distinguish a restriction from a delivery obligation

Two donations may both be earmarked for a purpose, but they do not necessarily have the same accounting treatment:

• Restricted donation without a delivery obligation: a donor gives money for a particular purpose, without imposing a qualifying delivery obligation. When the NPO controls the money or has a right to receive it, the donation is generally recognised as income, attributed to the appropriate restricted fund.
• Grant with a delivery obligation: a funding agreement requires the NPO to complete an identifiable, enforceable activity or deliverable. If the money is received before that obligation is fulfilled, the amount is initially recorded as a liability, not grant income. Revenue is recognised when, or as, the obligation is fulfilled.

A restriction on how money may be spent does not automatically create a delivery obligation. The terms of the agreement must be assessed before choosing the entry.

Receiving a restricted donation without delivery obligations

On 10 January 2026, the association receives EUR 727 from Benjamin Foster for Project 1. The donation is restricted to Fund A, but does not include a qualifying delivery obligation.

Double-entry accounting

• Date: 2026-01-10
• Description: Restricted school fund donation month 1
• Debit account: Bank:Fund A
• Credit account: Grants restricted Project 1:Fund A
• Amount: 727.00
• CC2: Project 1
• CC3: Benjamin Foster

Income & Expense accounting

• Date: 2026-01-10
• Description: Restricted school fund donation month 1
• Income: 727.00
• Expenses: leave empty
• Account: Bank:Fund A
• Category: Grants restricted Project 1:Fund A
• CC2: Project 1
• CC3: Benjamin Foster

Result: EUR 727 increases the bank balance and is recognised as income attributable to Fund A.

Paying project expenses

On 12 January 2026, the association pays EUR 307 for school programme expenses.

Double-entry accounting

• Date: 2026-01-12
• Description: School programme expenditure month 1
• Debit account: Expenses Project 1:Fund A
• Credit account: Bank:Fund A
• Amount: 307.00
• CC2: -Project 1
• CC3: leave empty

Income & Expense accounting

• Date: 2026-01-12
• Description: School programme expenditure month 1
• Income: leave empty
• Expenses: 307.00
• Account: Bank:Fund A
• Category: Expenses Project 1:Fund A
• CC2: -Project 1
• CC3: leave empty

Result: considering these first two transactions alone, Fund A has EUR 727 of income and EUR 307 of expenses, producing a surplus of EUR 420. The CC2 analytical centre also shows EUR 420 because income is added and expenses are subtracted.

Receiving an advance with delivery obligations

On 11 February 2026, the association receives an advance of EUR 3,000 attributed to Olivia Reynolds. The funding agreement includes qualifying delivery obligations that have not yet been fulfilled.

Double-entry accounting

• Date: 2026-02-11
• Description: Fund B advance with enforceable delivery obligations
• Debit account: Bank:Fund B
• Credit account: Grant oblig. liability:Fund B
• Amount: 3000.00
• CC2: leave empty
• CC3: Olivia Reynolds

Income & Expense accounting

• Date: 2026-02-11
• Description: Fund B advance with enforceable delivery obligations
• Income: 3000.00
• Expenses: leave empty
• Account: Bank:Fund B
• Category: Grant oblig. liability:Fund B
• CC2: leave empty
• CC3: Olivia Reynolds

Result: the bank balance increases by EUR 3,000 and a corresponding liability is recognised. The advance is not yet grant revenue and does not increase Fund B's net assets.

In the Income & Expense model, Grant oblig. liability is an account defined in the Accounts table. Although it is entered in the Category column, the amount is reported as a liability rather than revenue.

CC2 is deliberately left empty because the project has not yet earned this income.

Recognising revenue after fulfilling delivery obligations

On 27 May 2026, the association achieves a milestone under the grant agreement and recognises EUR 1,200 as revenue.

Double-entry accounting

• Date: 2026-05-27
• Description: Recognition of part of Fund B advance, milestone achieved
• Debit account: Grant oblig. liability:Fund B
• Credit account: Grants restricted Project 2:Fund B
• Amount: 1200.00
• CC2: Project 2
• CC3: leave empty

Income & Expense accounting

• Date: 2026-05-27
• Description: Recognition of part of Fund B advance, milestone achieved
• Income: 1200.00
• Expenses: leave empty
• Account: Grant oblig. liability:Fund B
• Category: Grants restricted Project 2:Fund B
• CC2: Project 2
• CC3: leave empty

Result: EUR 1,200 is transferred from the grant liability to recognised income. No additional money enters the bank. After this transaction, EUR 1,800 of the original advance remains a liability.

The tutorial includes a second milestone of EUR 1,200 on 10 October 2026. After both milestones, the remaining liability relating to this EUR 3,000 advance is EUR 600.

How to interpret the accounting results

Considering only the first four example transactions, and not all other transactions recorded in the annual tutorial:

• Bank: EUR 3,420 (EUR 727 received, less EUR 307 paid, plus EUR 3,000 received in advance).
• Outstanding delivery obligation liability: EUR 1,800 after the first milestone.
• Recognised income: EUR 1,927 (EUR 727 for Fund A and EUR 1,200 for Fund B).
• Expenses: EUR 307 for Project 1.
• Net assets generated by these four transactions: EUR 1,620, consisting of EUR 420 for Fund A and EUR 1,200 for Fund B.

The advance is therefore correctly distinguished from revenue. It increases the bank balance immediately, but affects the reported income only when the related delivery obligations are fulfilled.

Fund transfers, opening balances and reporting

• No fictitious bank payments: moving an amount from unrestricted to restricted net assets is not automatically a movement of cash. Do not record a bank payment just to create a fund balance.
• Transfers must be permitted: INPAS allows transfers between funds only where legally permitted. Describe and reconcile them in the fund movement disclosures.
• General Fund: The INPAS tutorials include a dedicated :General segment for the unrestricted General Fund. This allows general transactions and transfers involving unrestricted resources to be identified separately from restricted funds. INPAS does not require this particular segment code; it is a practical organisational choice within Banana Accounting+.
• Opening balances: opening balances assigned to individual segments may require dedicated segment opening entries or the appropriate carry-forward procedure in Banana.
• Fund reconciliation: for each relevant fund, explain its purpose and reconcile the opening balance, recognised income, expenses, other changes, permitted transfers and closing balance. Do not treat a segment card's total as the net assets of that fund.

INPAS reporting reminder

Fund accounting is covered by INPAS, while revenue from grants and donations with or without delivery obligations is covered by INPAS. Banana provides detailed ledger and reporting tools to prepare this information, but the NPO remains responsible for assessing its grant agreements, allocating transactions correctly, preparing the required statements and completing the explanatory notes.