Throughout CharityEngine®, you may have noticed field boxes asking for information on Funds or GL Codes, especially in Transactions. What exactly is the difference? Which one should you fill in?
General Ledger (GL) Codes: General Ledger (GL) codes are specific. They are used with every single instance in which money is handled; the donations and transactions have GL codes, but so do the salaries of the employees in a nonprofit, and so does the money the nonprofit itself spends. Each transaction between entities has a numbered GL code. This allows for greater flexibility and a more specific understanding of transactions.
Funds: Funds are more of an umbrella. There are GL codes assigned to transactions, but each transaction can be assigned a fund for the use of the donor and the nonprofit records. In a nonprofit, one of the most important things is making sure the donated money is being used for what the donor expects it to be used for. Assigning a fund to a transaction allows the nonprofit to keep a record of what cause, campaign, or charity the donation was intended to support, therefore successfully keeping track of how much money a cause has garnered and how to accurately spend their accumulated donations. It also allows for general tracking of funds in an easy-to-understand manner.