The primary need for fund accounting with nonprofit organizations is to be able to report back to their funding sources how their money was used. Fund Accounting is the concept of matching a source of specific funds and how it is spent. This includes Grants, Contracts and other, designated monies. The reporting requirement often dictates that funds are reported based on the contract year, which may be different than that of the organization. There are many other compliance issues for nonprofits, but this is the primary use of Fund Accounting.