Double-Entry vs. Single-Entry Accounting

ChurchTrac is a Single Entry Accounting system that uses a Cash-based or Fund-based approach to accounting.

Whether you are a professional accountant or have been helping churches manage their finances, it is worth going over the differences between these two approaches to accounting and why ChurchTrac uses the Single-Entry method.

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Single Entry

The Single-Entry approach works just like your checkbook. You track your income and expenses to monitor your current balances on your assets and liabilities.

Most churches just need to know their current balance and what the money is designated for. Also, most ministries are supported through donations, therefore do not need to invoice anyone for payment. Here's an example of what that looks like in a spreadsheet:

Double Entry

Double-Entry accounting is the process of recording every transaction in two accounts as either a debit or a credit. The amounts recorded to debits must always equal the amounts recorded to credits.

This method requires invoicing to receive payment. Double-Entry is best for managing assets, focusing on the difference between liabilities and equity.

The Double-Entry approach makes sense for a business that has an Accounts Payable and an Accounts Receivable. It also makes sense for especially large churches and ministries. Here's an example of what this looks like:

Is ChurchTrac Accounting right for my church?

The biggest financial priority of any ministry is tracking Funds or designated balances of money. Monitoring income and expense Categories (i.e. knowing where money is coming from and how it is being spent) is also important.

Unless your church regularly sells products and services, you will not need to invoice to receive income. Therefore, the dual entry is probably not necessary. In this way, most churches are not structured like a business and therefore do not need the Double Entry accounting method.

ChurchTrac Accounting was designed with your church or ministry in mind. Our decision to utilize the Single-Entry method hinged on two facts: Dual Entry is more complicated than ministries need and does not have the ability to account for donations.