There are number of subtle but important principles at play in this subject. The materials provided here are really overview-type summaries. Please note that further discussion can be very useful.
Our recommendations for storing pledges within the NPSP differ based on
whether your organization uses a cash-basis
or accrual
accounting system. Some brief explanations are provided at
Accounting System.
Decisions about whether to use the NPSP Payments package might be influenced by the accounting system that is used. The NPSP Payments package was originally designed with consideration of accrual-based accounting needs. Organizations using cash-basis accounting may derive little additional benefit from use of the NPSP Payments package. The NPSP Recurring Donations package may suffice.
The NPSP Recurring Donations package was the firet NPSP Package designed to provide data structures and related automation specifically intended to store data related to finalized pledge promises and related installment payments
The Recurring Donations package is perhaps the approach of choice for organizations that are not using the NPSP Payments package and it's related SF Payment object. Some organizations might choose this approach to minimize data storage charges by avoiding the creation of Payment records.
Detailed recommendations for use of the Recurring Donations package are provided at NPSP Recurring Donations
The NPSP Payments object was released later to provide separation of data representing revenue and cash - a typical need of accrual-based accounting systems.
Usage practices differing from those used with the Recurring Doantions package are needed to attain the full benefits intended for the NPSP Payments package.
NPSP Payment records are intended to separate tracking of fundraising efforts and fund collection data, providing
written offpayments.
(This was the original motivation for development of the NPSP Payments package.)
Rigorous use of the NPSP Payments package can also effectively separate storage of
outcomes of efforts to arrange donations
from later data documenting
donation collection
results.
Detailed recommendations for use of the NPSP Payments package are outlined in NPSP Payments