Our nonprofit receives payments via Paypal for workshops we provide. For a workshop in April, we may receive payments in Jan, Feb, March and April. I'd like to show all of these payments in the Income Statement for April.
Currently, we're using cash basis accounting, and so payments are displayed when they're received. This makes if very difficult to compare income and expenses and get accurate info from our Financial Reports. So I'm investigating how our data entry will be different if we use accrual accounting to manage this.
Currently, we download PayPal payments from the banking feed as deposit transactions into the revenue category for the particular workshop in the Chart of Accounts. Do I need to create a payable account instead of categorizing these directly into a revenue account? If so, what would the workflow
If the payments, deposits, are refundable they can be booked as deferred income, if they are not refundable then they are income when received - cash or accrual basis.
A deposit is either income (sales) or you book it to deferred income, cash or accrual basis
Best option IMO is to use classes for the deposits/payments, one class per month and tag the transaction. Class reports can list by date range. If you receive the deposit/payment in Jan but it is for the Apr workshop, use the april class when you tag it.
Thanks for your reply. The payments are refundable if people decide not to take the workshop. But I'm not sure if it's worth the extra effort to book all these payments as deferred income. Why do you think using classes is a better option?
I don't know anything about classes, but I'll investigate.