1. Case study on charity bookkeeping
2. Case study on charity accounts preparation
Status: Registered charity
Sector: Recreation and sports
Annual incoming resources: £500k
Inexperienced corporate accountant who was not familiar with charity accounting requirements to prepare annual accounts was hired. Needless to say, the client was not happy with the final product so were looking for specialist charity accountants who were experts in preparing charity accounts that were compliant with Charity law. There were a number of issues like:
- Incorrect restricted grant fund balances in the accounts that went as back as seven years
- Errors in calculating net book value of building and equipment
- Certain grants were incorrectly classified as unrestricted income
- Absence of a reserves policy in trustees annual report
- All of which lead to non-compliance with charity SORP as required by Charity law.
- Legal and professional fees for advice on leases and personnel were incorrectly classified as governance cost.
- Irrelevant and inaccurate accounting policies and incomplete disclosure on transactions with trustees
- Paid high fees to accountants for below average quality of work
- Proactively, we went and looked at last seven years accounts. We corrected the errors found and arrived at a correct restricted grant fund balance which the client was very happy about.
- All grant documents were reviewed and income and expenditure was classified accurately.
- We amended the accounting policies
- After discussions with the client we ensured all mandatory disclosures we made in the accounts
- We helped the client understand and draft a reserves policy. In addition to this we also suggested information that they could add to the Financial Review section of the Trustees’ Annual Report.
- Annual accounts with figures that make sense as a result of our painstaking work
- Clear tracking of restricted and unrestricted income and expenditure due to referenced notes and disclosures in the accounts
- Informative Trustees’ annual report because of our advice
- All this, for less than what it had cost the client in accounting fees in the previous year.
- Another happy client!!!
Most small charities have problems. Your charity might have a couple too. But, more importantly, it is how you resolve them that matters. Ignoring teething problems in mature or start up charities will only result in compounded problems further down the road. So, act now. Find the right accounting system, the right staff and the right accountant. And not before long, you will reap the benefits of having information at your finger tips!
If you think we can help you with any of your bookkeeping or accounts problems we would be glad to hear from you. So call us now on 02081442640 to have a chat and find out how we can resolve your difficulties. You can also contact us for a free quote here.