Charities
TASlondon outsourced accounting plays a crucial role in ensuring the financial transparency and accountability of charities. By diligently recording and analysing financial transactions, accountants provide an accurate picture of a charity's income, expenses, and overall financial health. This enables charities to effectively manage their resources, make informed decisions, and fulfil their mission of making a positive impact in society. Moreover, our outsourced accounting practices ensure that charities comply with regulatory requirements and demonstrate accountability to their donors and the public. From budgeting and financial planning to preparing financial statements and conducting audits, accountants play a vital role in helping charities maintain their financial integrity and uphold the trust placed in them by donors and beneficiaries.
Why you must prepare charity accounts
It's other people's money that you hold. It's therefore essential that this is properly accounted for and that the public is reassured. The Scottish Government has produced accounting regulations that set out how charity accounts must be prepared and checked.
How to prepare your charity's accounts
You must prepare your charity's accounts in one of two ways, depending on the size of its income, its legal form or how its constitution is worded. Receipts and payment accounts are a simple form of accounting that consist of a summary of all monies received and paid via the bank and in cash by the charity during its financial year, along with a statement of balances.
Group accounts
Any parent charity where the gross income of the group (the parent charity and its subsidiaries) is £500,000 or more after consolidation adjustments, must prepare group accounts. However, where a charitable company is required by section 399 of the Companies Act 2006 to prepare group accounts, those group accounts are prepared under the Companies Act 2006, as well as under charity law and the accounting regulations.
Reporting by Auditors and Independent Examiners to the Regulator
Auditors and Independent Examiners in Scotland, England and Wales and Northern Ireland have a common statutory duty to report matters of material significance to the charity regulators.
OSCR, the Charity Commission for England and Wales and the Charity Commission for Northern Ireland have agreed a common list of matters of material significance to assist the auditor and Independent Examiner in reporting important matters on a timely basis.
Using restricted funds
Restricted refunds are donations which have been given to your charity for a specific purpose – sometimes to deliver a special project or a distinct piece of work or to be used only for one of your charitable purposes if you have more than one. The person or organisation giving those funds to your charity has done so trusting that you will use the funds for that reason and no other. However, sometimes it is possible to use the funds for a different purpose (like in the COVID-19 crisis) if you are able to contact the donors to ask them.
Who are the charity trustees?
Charity Trustees are the people in overall control and management of a charity. They may be called directors, management committee members or committee members, but the law considers them to be 'charity trustees'. They are responsible for the charity's governance and strategy, and for making sure that the charity is administered effectively. They must account for its activities and outcomes.
