In this guide · 8 sections
Short answer
Tag every income and expense line with a fund, using Xero tracking categories or QuickBooks classes, backed by fund balance accounts. IPCs must also submit tax-deductible donation records to IRAS by 31 January each year, usually through a donation system that supports IRAS's API.
What restricted fund tracking means in practice
Donations and grants given for a specific purpose are restricted: they can only be spent on that purpose. General donations are unrestricted. The board may also set aside unrestricted money for a project, which is a designated fund but still legally unrestricted. Your accountant or auditor will advise how these must be presented in the financial statements under the Financial Reporting Standards or the Charities Accounting Standard.
| Fund type | Example | What the software must show |
|---|---|---|
| Unrestricted | General donations, membership fees | Overall income and spending |
| Restricted | Building fund appeal, programme grant, bursary donations | Income in, spending out and balance remaining for each fund |
| Designated (board) | Reserve set aside for a new van | Amount set aside and used, separate from general funds |
| Endowment | Capital to be kept, with only income spent | Capital kept intact, income tracked separately |
The common mistake is recording everything as 'donations' and trying to split funds in a spreadsheet at year end. It works until an auditor or grant officer asks how much of a specific grant is left.
How Xero, QuickBooks and Zoho Books handle funds
None of the mainstream tools is true fund accounting software, but all can tag transactions so you can report by fund.
Xero
Tracking categories- Two active tracking categories, up to 100 options each
- Use one for Fund, one for Programme or Project
- Tag at line level on invoices, bills, bank transactions and journals
- Profit and Loss by tracking category shows income and spending per fund
Best for: Charities with an accountant already using Xero.
QuickBooks Online
Classes and locationsPlus S$79/mo, Advanced S$124/mo (list prices)
- Class tracking only on Plus and Advanced
- Plus: up to 40 classes and locations; Advanced: unlimited
- Sub-classes for programme within fund
- Budgets can be set per class
Best for: Charities wanting fund and programme reports in one tool.
Zoho Books
Reporting tags- Reporting tags on transactions
- Lower-cost plans available
- Check tag limits for your plan
- Good if you already use Zoho apps
Best for: Very small charities on a tight budget.
QuickBooks figures are from its Singapore pricing page and class tracking help, as of October 2026, before GST and excluding introductory discounts. Xero's two-category limit is set out in Xero Central's tracking category articles.
Set up fund tracking step by step
This is the order that avoids rework. Involve your accountant or auditor at step one.
List your funds with your treasurer and accountant
Write down every restricted fund, its purpose, its source and any reporting the donor or grantor requires.
Set up the chart of accounts
Separate income accounts by type (general donations, grants, events, fees) and expense accounts by nature. Add fund balance accounts if your accountant wants them.
Create the Fund dimension
In Xero, a tracking category called Fund; in QuickBooks, classes. Include an 'Unrestricted' option so nothing is left untagged.
Add a second dimension if needed
Programme, centre or project. Keep the list short: tags only help if staff apply them consistently.
Set bank rules and defaults
Recurring grant receipts and regular expenses can be tagged automatically by bank rules.
Review monthly
Run the report by fund each month and check untagged items. Year-end is too late to fix a year of missing tags.
IPC donation records and IRAS
If your charity is an Institution of a Public Character (IPC), donors' tax deductions depend on you reporting their donations. IRAS's page on submission of donation records says IPCs must submit all tax-deductible donation records for the previous calendar year by 31 January.
- Submission is by API, through a donation management system (DMS) integrated with IRAS's Donation API or an in-house system.
- IRAS publishes a list of DMS that support the API. The list dated 26 November 2025 has 18 systems; IRAS stresses the list is not an endorsement.
- Corppass authorisation with the 'Approver' role for the Submission of Donation Records service is needed.
- Each record needs the donor's identification number (NRIC, FIN or UEN), which makes donor data a PDPA matter too.
Accounting software is usually not the donation system. A common set-up is a DMS for donor records and IRAS submission, with daily or monthly totals posted into Xero or QuickBooks against the right fund. Our guide to charity donation pages covers the website side.
Annual submissions and governance
The Charity Portal says charities must submit their annual report, including financial statements, and the Governance Evaluation Checklist online within 6 months of the end of each financial year. Where an audit is required, financial statements follow either the Financial Reporting Standards or the Charities Accounting Standard.
Year-end checklist for a small charity
Our guide to charity website governance disclosures covers what to publish online.
Non-profit discounts
Xero's non-profit page offers 25% off for registered not-for-profit organisations on a business pricing plan; you raise a case in Xero Central with proof of eligibility during the free trial or within 31 days of subscribing. Check current offers from QuickBooks and Zoho directly, as they change. For email and office software, see our guide to Microsoft and Google discounts for charities.
Do it yourself or get help?
A treasurer comfortable with accounting software can set up tracking categories in an afternoon. The value is in agreeing the structure with your auditor first, and connecting bank feeds and templates so tagging happens by default.
Our Accounting Software Setup (S$490) helps you choose between Xero, QuickBooks Online and Zoho Books, sets up the organisation in your name with a chart of accounts and tax settings agreed with your accountant, connects up to 2 bank feeds, creates branded templates and invites up to 5 users plus your accountant. IT Sorted is a Singapore-based team of developers with over 10 years of experience; you pay upfront, send the brief in writing and follow progress on your order page.
Frequently asked questions
Many small charities use mainstream cloud tools such as Xero, QuickBooks Online or Zoho Books, set up with tracking categories or classes for each fund. Larger charities sometimes use ERP systems. For IPCs, donor records and IRAS submission usually sit in a separate donation management system that posts totals into the accounting software.
Create a tracking category called Fund with an option for each restricted fund plus Unrestricted, and tag every income and expense line. Xero allows two active tracking categories with up to 100 options each. Your accountant may also set up fund balance accounts so each fund's remaining balance shows on the balance sheet.
IRAS says IPCs must submit all tax-deductible donation records received in the previous calendar year by 31 January each year. Submission is via IRAS's Donation API, using a donation management system that supports it or an in-house integration, with Corppass authorisation for the Approver role.
QuickBooks Online uses classes for this, but class tracking is only available on the Plus and Advanced plans. In Singapore, Plus allows up to 40 classes and locations, and Advanced has no limit. Sub-classes can represent programmes within a fund, and budgets can be set by class.
Xero offers 25% off for registered not-for-profit organisations on a business pricing plan. You apply by raising a case in Xero Central with evidence of your status, either during the free trial or within 31 days of subscribing, and the discount is applied once confirmed.