From e968357058e916fa8c0e58af6c21325e1ec9e915 2013-11-14 17:25:38 From: Bradley M. Kuhn Date: 2013-11-14 17:25:38 Subject: [PATCH] Add Work flow use case. --- diff --git a/UseCases.mdwn b/UseCases.mdwn index 240dcdcd51eaa1ffabc37eafb55bb080f3459eaa..1dc325e9a02c525409ea4d6816a58d36072b87e5 100644 --- a/UseCases.mdwn +++ b/UseCases.mdwn @@ -24,6 +24,7 @@ You should add your use case as a subpage of the [[UseCases]] page, to create a - [[Handling contractors and contracts|UseCases/ContractorsAndContracts]] - [[Handling multiple currencies|UseCases/MultiCurrency]] - [[Draft transactions and approval|UseCases/DraftTransactions]] +- [[Workflow for Non-Profit Accounting|UseCases/WorkFlow]] ### Technical-User-Center Use Cases diff --git a/UseCases/WorkFlow.mdwn b/UseCases/WorkFlow.mdwn new file mode 100644 index 0000000000000000000000000000000000000000..c5194466ad045b2467e740085078ecc1e8cc0ad0 --- /dev/null +++ b/UseCases/WorkFlow.mdwn @@ -0,0 +1,26 @@ +# Non-Profit Workflow + +Many accounting systems seem to assume that the workflow fits a certain type +of uses. While the ability to impose a specific workflow (e.g., for a +bookkeeper who might make an error easily if the system doesn't require a +workflow), the workflow should not be dictated. + +## The "Unaccrued Invoice" Example + +The easiest example I have of this relates to accruing income upon invoice +generation. Non-profits very typically generate invoices as part of a +fundraising discussion *even though* the non-profit doesn't have a good faith +belief that the invoice will be paid. Using an invoice to convince a donor +to make a donation is, in essence, just a fundraising strategy to pressure +for them to commit to a donation that the donor has hinted they might make. + +Under GAAP, these invoices should **not** be accrued nor recognized, because +the organization doesn't have a good faith belief that the income is +forthcoming. + +Many accounting systems assume that the user would never possibly generate an +invoice without realizing the income immediately. In most for-profit setups, +this is true, but for non-profits, there is good reason to generate invoices +before accruing the income. In fact, if you're generating an invoice merely +to "inspire" a donation, it's wrong to accrue that, since you don't have a +good faith belief that the invoice will be paid.