Budgeting and Reporting on Balance Sheet Accounts

Martus primarily focuses on income and expense accounts. However, it is possible to budget for and report on actuals related to balance sheet accounts (such as capital expenses or mortgage payments) within Martus. See the appropriate section below for details about how this can be done. Note the particular requirements and limitations of your specific accounting system integration. 

Changing the Account Type

For Sage Intacct, QuickBooks, and Financial Edge NXT Integrations - All asset and liability accounts are synced into Martus automatically, but the sync sets them to Inactive within Martus because they are not typically used.  

To budget for an asset or liability account within Martus, use Setup > Accounts to change the status of the account to Active and lock the status so that it is not switched back to Inactive by the next sync.  

Additionally, change the type of the account to 'Expense' or 'Other Expense' (for liability accounts) or to 'Income' or 'Other Income' (for asset accounts) and lock the account type. 

That will ensure the account is available for budgeting and displayed on the Financial Reports. 

You may also wish to set the account to Restricted and/or Excluded in order to limit user access.  

For File-Based Integrations 

To budget for an asset or liability account within Martus, use Setup > Accounts to change the type of the account to 'Expense' or 'Other Expense' (for liability accounts) or to 'Income' or 'Other Income' (for asset accounts). 

That will ensure the account is available for budgeting and displayed on the Financial Reports.

You may wish to set the account to Restricted and/or Excluded in order to limit user access. 

Using Contra Accounts

This is an alternative method of budgeting for and reporting on balance sheet accounts. 

This contra account method can be used for any accounting system integration with Martus. 

Follow the procedures below:

Budgeting Asset Accounts 

To facilitate this you can set up one or more Capital Purchase expense accounts to book asset purchases and corresponding Contra account(s).  When a capital purchase is made, the entry would need to include a debit to the Capital Purchase Expense account and a credit to the Contra expense account (in addition to crediting cash and debiting the asset account).

Budgeting Liability Accounts 

To facilitate budgeting things like Mortgage Principal payments, you can employ the same Contra account method to facilitate this. 

Excluded Accounts

Additionally, to produce GAAP & Cash-based Income Statements, you can apply the “Exclude” flag to the Contra accounts. The default view for income statements will be more cash-based while choosing the “Include Excluded Data” feature includes the Contra account(s) for a more GAAP compliant report. 

To do this, use Setup > Accounts  and flag set the Contra accounts so that they are “Excluded”.

Limiting User Access to Certain GL Accounts

MartusTools has several methods for limiting user access to certain GL accounts.  This video shows how these methods work. 

Contra Revenue and Contra Expense Accounts

Contra revenue accounts are discounts to income. 

Within Martus, contra income accounts show on reports and are budgeted as negative numbers, reducing total income.

Contra expense accounts are reductions to expense. Within Martus, contra expense amounts show on reports and are budgeted as negative numbers, reducing total expenses.

For Sage Intacct Integrations

Sage Intacct has no setting that specifies whether an account is 'Income' or 'Expense', so when Martus syncs the Chart of Accounts from Sage Intacct, 'Normal Credit' accounts are set as' Income' and 'Normal Debit' accounts are set as 'Expense'.

However, Martus also supports using either 'Normal Credit' or 'Normal Debit' on contra revenue and contra expense accounts within Sage Intacct; depending on how accounts are defined in Sage Intacct, it may be necessary to make configuration changes in Martus to properly handle contra accounts.

• Setting the account type within Setup > Accounts determines whether the account is shown in the 'Income' or 'Expense' section on Martus screens. 
• Once you’ve made this change, lock the type to ensure that the account sync won’t update it.  
• The Reverse Sign setting reverses the sign on budget amounts as they are uploaded to Sage Intacct, so that they are added to Sage Intacct with the reverse of the sign used in Martus. The Reverse Sign setting also affects the process of pulling a budget out of Sage Intacct and into Martus (normally done only by Martus Support personnel at the time of implementation).
  
  

For all contra revenue accounts:

• Set the accounts to 'Income' and lock the type.
• If your contra revenue accounts are set to 'Normal Debit' in Sage Intacct, then also set the accounts to Reverse Sign.

For contra expense accounts:

• Set the accounts to' Expense' and lock the type.
• If your contra expense accounts are set to Normal Credit in Sage Intacct, then also set the accounts to Reverse Sign.
  
  
  

Illustration of the Martus Setup for Contra Revenue Accounts that are Normal Debit in Sage Intacct

Change Account Type

If you change the 'type' of an account after implementation, you will need to re-sync all months that have any transactions with this GL account. 

You will also want to consider how this change affects your budget. You may need to change the sign on currently-budgeted amounts.

You may also need to ask Martus Support to re-load any budgets that they pulled from Sage Intacct at an earlier point in the implementation process.

For QuickBooks Integrations

QuickBooks has a setting that specifies whether an account is 'Income' or 'Expense', and Martus uses this information when syncing the Chart of Accounts from QuickBooks.  

For contra accounts, you may wish to change the account 'type' to indicate whether the account is shown in the 'Income' or 'Expense' section on Martus screens.  

Once you’ve made this change, lock the type to ensure that the account sync won’t update it.

For File-Based Integrations

For File-Based Integrations, you control the account 'type' within Martus. 

Simply use the desired 'type to determine whether the account is shown in the Income or Expense section on Martus screens. 

You don’t need to lock the type, since there is no automatic account sync.

Identify Activity as Cost of Goods Sold (COGS)

There is a client-level option within Martus that makes use of the account 'subtype.'

When that option is turned on by Martus Support, activity for accounts designated with the 'CostOfGoods' (COGS) subtype is summarized separately on Martus financial and budget reports.

Contact Martus Support if you would like to have this feature activated.

Reporting on Cost of Goods Within Martus

Activity for COGS accounts is segregated and summarized on Martus reports, as illustrated with this example from the Income Statement.

Note that the Gross Profit line and the Gross Profit Percent is not calculated if you filter the report in a way that includes no Cost of Goods lines

Sage Intacct Integrations 

The 'Chart of Accounts' sync sets the subtype to 'CostOfGoods' if the account category in Intacct starts with "Cost of ..." and ends with 'Sold' or 'Revenue', or if the category is 'Manpower Costs'.

QuickBooks Integrations

The account sync sets the subtype to 'CostOfGoods' if the account type within QuickBooks is 'Cost of Goods'.

For Financial Edge NXT integrations

The Chart of Accounts sync does not set the account subtype in any way.

Manually Change Accounts in Martus to 'Cost of Goods' 

If there are some other accounts that you’d like to see treated as 'Cost of Goods' on Martus reports, an Admin user can use Setup > Accounts to manually set the account Subtype to 'CostofGoods', then lock the account Type. 

The account Type must be locked to prevent the next sync from updating the Subtype to mirror the accounting system.

Clients with File-Based Integrations can manually set the Subtype to' CostOfGoods'.

General Ledger Account Management

The Accounts page displays all General Ledger accounts from the organization's financial system. For any API integration, Martus will sync the chart of accounts every night.  For file-based integrations, GL account information is maintained by a Martus Admin.  

For all integrations, it is important to understand how to utilize the Accounts page to manage how an account interacts with Martus.

The accounts page allows for managing the account type, and the account category, as well as the status, restrictions, and visibility of the account.  

Updating Accounts

Regardless of the type of change, the following steps should be followed to change an account type:

One account at a time:

1. Go to Setup > Accounts
2. Select the Account
3. Click Edit
4. Choose the appropriate option
   
5. Click Save

Multiple accounts at a time: 

1. Go to Setup > Accounts
2. Select the Account
3. Click Edit
4. Choose the drop down on the appropriate option
   
5. Click Save
   
   

Account Types

Martus will report and allow budgeting to the following types of accounts. Each account type will be represented in its own section on financial reports with the Other Income and Other Expense sections falling below the line. It is not usually necessary to change the Account type, but it is sometimes helpful to manage accounts in Martus, for example, many times it makes sense to move an account such as depreciation to Other Expense. 

• Income
• Expense
• Other Income
• Other Expense
• Cost of Goods Sold (a subtype of Expense)
• Statistical - Intacct clients at Standard+, Advanced+ or Enterprise levels

For API Integrations: 

If you change the account type,  be sure to also select Lock Type and Subtype so the nightly sync does not change the status back to what it is in the accounting system. 

Account Status

Accounts can be set to Active or Inactive status in Martus (apart from what their status is in the accounting software). Sometimes this is helpful when managing many accounts or during transitions from one account to another. Note that certain account types such as Liabilities and Bank types will sync into Martus as Inactive regardless of their type in the accounting system as Martus doesn't report on these types.

For API Integrations: If you have updated the account status, be sure to also select Lock Status so the nightly sync does not change the status back to what it is in the accounting system. 

Managing Account Security

Martus allows Admin users to control access to accounts. The following options work in conjunction with Security Roles to limit access to accounts.

• Restricted: Non-Admin users will not be able to see these accounts unless they have the user permission to View Restricted. Non-Admin users cannot update budget values for these accounts unless they have the user permissions to View Restricted and Edit Restricted.
• Excluded: Non-Admin users will not be able to see these accounts unless they have the user permission to View Excluded.   Excluded accounts are not shown by default on any Martus reports; Admin users and those with the View Excluded permission can use the Include Excluded checkbox to include those accounts on reports.
• Drilldown Limited: Non-Admin users will not be able to see transaction detail for these accounts on the Transaction Report unless they have the user permission to View Drilldown Limited.

Donation Accounts

Marking an account as Donation includes the monthly totals in the Weekly Giving widget on the Dashboard > Financials' Dashboard report.

Account Categories

Click here for more  information on managing Account Categories.