Cash Accounting

Cash accounting is considered the simplest way to keep track of your money. You record revenue when you receive money and when you pay out money. While cash accounting can tell you exactly the money you have in the bank right now, it isn't the best when you want to look ahead at upcoming expenses and revenue.

For example, your church receives an electric bill for $1,000. Using the cash accounting method, you wouldn't record the amount for the electric bill until you actually pay the bill, which could be days or weeks later.

Accrual Accounting

Accrual accounting records revenue when you earn it and expenses when you incur them, regardless of when the transaction of cash occurs. It often provides a more accurate picture of your financial performance.

For example, your church receives an electric bill for $1,000. Using the accrual accounting method, your church would record the bill as an expense the day it receives the bill. While the money hasn't officially left your bank account, you already know how much money will be in your bank account when you pay that expense. Simply put, accrual accounting helps you plan ahead. This makes it helpful for larger and more complex organizations.

Pledging & Accrual Accounting

While you can use both cash and accrual accounting with the Batch Manager Tool, you can include pledges in your accrual accounting efforts. This way, you can see what you can expect from your congregants throughout the year. While pledging information won't be stored in MinistryPlatform, you can use your accounting solution and enter information based on the pledging data you see in MinistryPlatform.