The accounting system design also includes development of a cost allocation plan, so that the costs that are shared among multiple activities can ultimately be reported as costs of those activities.  The required activities for external reporting are Business Management, Fundraising, and Programs (with separate activities for each of your program areas).  As an example, consider office costs (phone bill, office supplies, etc.). These costs benefit all activities, so we don’t want to report them as Business Management costs – that would make our overhead look higher than it really is. So we capture office costs that benefit all activities in a temporary shared costs bucket, and then periodically allocate the costs from that bucket to the various activities based on an appropriate allocation method.  This allows you to accurately reflect expenses by activity and avoid overstating your overhead percentage, which is a key metric that funders evaluate.