Every source of income has to be properly accounted for, including your grant income. But how do you account for grant income? What are the considerations you need to make? In this blog, we’ll give you some details on how you should account for grant income and how job costing software can help. Find the best job costing software by visiting this website.

What is Grant Income

First, let’s define grant income. Grant income is given to an individual or company through private means or through the government. These grants are given without the expectation of payment in return, but you are typically required to report on activities and how the grant money is being used. Grants may also sometimes be restricted for what they can be used for, but you never have to provide any type of good or service to the entity providing the grant.

How to Account for Grant Income

Grants are usually considered taxable income, however, there is some nuance to this. For instance, if you’re using the grant for an expenditure that would appear in your profit and loss account, you may not be tax liable for the grant. If the grant is used on a fixed asset, it is deferred and matched to the depreciation of the asset. Grant income is also outside of VAT.

Grant income accounting can be somewhat complicated, but as long as you’re tracking your activities and expenditures, you should be able to keep things organized. Of course, there are tools out there that can make grant accounting simpler.

Use Job Costing Software for Your Grant Accounting

When you’re having to report your grant activities and determine how much time employees are dedicating to grant activities or the expenses they’re incurring, you can use job costing software. This type of software can help you track employee activity and see how much time and expenses they’re dedicating to grant-related tasks. This will help you get a better picture of your grant accounting and properly attribute the expenditures to your accounting balances. If grants are a regular part of your accounting workflows, make sure you’re using software that makes things easier.

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