Fund Accounting Service
Fund Accounting focuses on accountability rather than profitability of an organization and it usually applies to non-profit organization like Charities, Clubs and Societies, Churches and Government Agencies where funds are disbursed for various purposes. With its non-profit oriented approach to accountability, fund accounting is different from financial accounting and management accounting. It pays attention to the allocation of fund from government or donation and the control of spending from the fund. Fund Accounting has Statement of Income and Expenditure (similar to Profit and Loss Account of Financial Statements) to conclude whether there is a Surplus (Funds Received is more than Expenditure) or Deficit (Expenditure is more than Funds Received). A Surplus means the organization has spent less than what has been given or allocated. A Deficit indicates that the spending exceeds the allocation (i.e. an over-spending).
Example of Fund Accounting
Charitable organizations usually require fund accounting service because they record their transactions in the form of receipts (i.e. donations or government funding) and payments. For example, a church receives donation to support its activities of running the welfare, students, etc programs. At the end of each accounting year, the church tabulates and determines if its collection is more than its spending (i.e. it accumulates some funds - surplus) or its spending is more than its collection (i.e. it digs into its reserves - deficit).
Singapore Budget and Fund Accounting
During Singapore Budget Announcement, usually in February to March every year, the Finance Minister informs us of the Budget Allocation, i.e. how much will be spent on defence, education, etc. He would then conclude whether Singapore would likely to end up with a Budget Surplus or Deficit.
Objective of Non-Profit Organization
Fund Accounting Allocation and Budgeting
The objective of a non-profit organization is to avoid a Deficit and provide as much benefit as possible to the members or public. As such, the organization must practise good financial discipline in terms of spending and ensure that resources are strategically allocated to the most important areas. Therefore, non-profit organization hire fund accountant for its budgeting and allocation of resources as well as limiting their expenditure and minimizing the chances of facing a Deficit at the end of the accounting year.
Accountant who are qualified and reliable to advise you on accounting matters may take you some time to find. We are one of the better accountants whom you can trust. Contact us now for accounting service, including financial accounting and management accounting.
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