What is “Functional Expense” accounting required by our CPA – Audit firm and IRS – and can QBs do this for us?
A> “Functional Expense” information is needed to periodically comply with aspects of General Accepted Accounting Principles, or GAAP , and show readers of a Ministry financial’s annual statement just how much has been spent for Program, or the fundamental reason why you exist, plus amounts spent in supporting the Ministry via the necessary Fund Raising and Management/General activities. If you file form 990, you need “Functional Expense” information. We maintain that your primary accounting system responsibility is to provide the daily accounting reports needed to make prudent and timely management decisions via the above SPFunds and GPFund structure. The Seven Goals found HERE might also be of interest to you. Also see our Editorial Here where we speak to what we call “GAAP Overkill” — especially in a Church setting. Then, at the year end, restructure such expense data for the necessary and vital “Functional Expense” information for mostly year end reporting to the public, and maybe
