In order to form an accurate picture of financial health, the actual deposits and expenses must be compared to what you forecast in your budget. An annual budget that includes projected expenses and revenues is an essential step. Setting up bookkeeping is not difficult. The basic elements of a bookkeeping system are described below. For small organizations, record keeping can be very simple.
Larger organizations tend to have a more complex system.
For either one, the basic needs are the same. In a bookkeeping system, all expenses are taken from and income put into categories established in your budget. The list of these categories is called the chart of accounts. The list alone will work for organizations with only a few programs. For more activities, numbers or codes are assigned to each category to make recording easier.