Key concepts and configurations

This section explains the key concepts underpinning CiviContribute and outlines the high-level configuration needed for its use.
Before you begin it is helpful to list out the types of contributions your organization receives (or wants to receive).

Financial types, financial accounts, and accounting codes¶

Organizations that use Chabad Suite have differing needs in terms of financial reporting. Some just want to know the total donation recorded whereas others want to be able to export a full set of financial transactions to import into their accounting software.

The CRM caters for both those groups by using Financial types to hide the complexity of double-entry bookkeeping from everyone who doesn't need to know about it, whilst still recording those transactions for organizations that do need them. If you are not planning on using your CRM to export accounting batches for bookkeeping, then you need only pay attention to Financial types and can ignore financial accounts.

Each financial type is linked to a number of financial accounts that can track income, assets, fees, and premiums (if applicable) as required as shown for the four default financial types in the following image.

The financial accounts should be based on your organisation's Chart of Accounts. In the CRM each contribution must be assigned a financial type. When the contribution is saved the appropriate debits and credits are automatically recorded for the financial accounts linked to that financial type.

You should consult with your organization's bookkeeper or accountant before setting up new or modifying the existing the financial types and financial accounts.

Financial Types¶

The standard financial types included within the CRM are event fee, member dues, donation and campaign contribution as shown in the image above, but you can modify these existing accounts or set up new financial types to suit your needs.

Generally, you will need one financial type for each type of income (revenue) you receive and track in your accounts. So if you report on tax appeal donations, festive appeal donations and recurring donations separately in your accounting software, then having only one "Donation" financial type in the CRM will not work, you will need one financial type called "Tax Appeal", another called "Festive Appeal" and yet another called "Recurring donations". 
Most Chabad Suite users will have one financial type "Donation" in conjunction with the campaign field (used as a sort of sub-type, ex: financial type is Donation and Campaign is Passover) and use the CRM to report on income. 

To create a new financial type navigate to Administer > CiviContribute > Financial Types, and click on Add Financial Type

When you create a Financial Type of a specific name, the CRM automatically creates a similarly named revenue (income) account and assigns it and the default accounts for asset, expenses and cost of sales to the new financial type. If you need to edit the accounts allocated to a financial type, you can do so by clicking on Accounts to the right of the appropriate financial type on Administer > CiviContribute > Financial Types. The aim behind this two step process is to simplify the common use case where an organisation has only one each of Deposit Bank Account, Accounts Receivable and Accounts Payable, but provide flexibility for more sophisticated setups.

Financial Accounts¶

As with financial types, the list of preconfigured financial accounts will suit the needs of many organisations but it can also be customized if your organisation requires changes or additions. (Remember, each new financial type will add a new revenue account with the same name.)

You edit financial accounts at Administer > CiviContribute > Financial Accounts.

The only required fields are Name and Financial Account Type. For revenue accounts these are set when you create the financial type.

How many of the other fields you fill in will be determined by your workflow. If you plan to export financial transactions from the CRM to import into your accounting software package you will need the accounting code (without extra or missing spaces). If you are using Quickbooks you will also need the account type code.

Note: Changing the financial account name will also change the financial type name.