What to Expect From a Team of Charity Accountants: The Importance of Robust Governance and Transparent Reporting

Our specialist charity accountants often speak with board members, trustees, and founders keen to understand their obligations in terms of reporting, accounting, regulatory compliance, and ensuring their charity, not-for-profit organisation, or community interest company is set up and run to the best possible standards.

Long-established charitable groups also come to us for help with accounts preparation and tax filings, with many going on to work with the James Todd & Co team longer-term on more in-depth and strategic projects and decision-making.

This guide covers the basics of the broad range of support and guidance we can provide, clarifying the areas in which a charity accountant can offer valuable input, effective advice, and specialist support to aid in compliance, efficiency, and financial management.

Contrasts Between General and Charity Accounting

While the principles of accuracy, on-time reporting, and transparency apply to organisations across the sectors, the environment and landscape for charities can mean that their accounting requirements and need for unbiased input can vary significantly from those of a commercial entity.

For instance, an accomplished charity accountant will be well versed in the complexities of managing charitable reserves, accounting and claiming gift aid correctly, handling the production of management accounts for trustees and board members, and ensuring bookkeeping and record-keeping adhere to governance policies.

Nearly all charities, irrespective of the social causes or missions they focus on, are exposed to pressures. Reductions in government support and allowances are coupled with increased demand for services, meaning that success isn’t solely reliant on awareness and marketing.

Instead, it depends on good governance, trust, credibility and effective management where supporters, partners and grant funders have absolute confidence when choosing a charity as a cause to support, volunteer with or advocate for.

We’ll run through some of the core charity accounting services we provide shortly, but the key is to use the expertise and know-how of a charitable accounting team to assist with across-the-board efficiencies, prepare for tax reforms, remain up-to-date with changes to the Charities Act and other niche and sector-specific regulations, and ensure your financial controls are up to the task.

How Third Sector Challenges Have Increased the Need for Targeted Accounting and Financial Expertise

If you already work for, represent, or serve within a charitable or non-profit organisation, you’ve almost inevitably seen major changes in recent years, with shifting obstacles that make strategic planning and innovation essential to longevity.

From economic volatility and cost-of-living crises to the closure of several funding streams, charities and community enterprises need to be as dynamic and agile as possible to keep pace.

Here is a snapshot of some of the core issues and pressure points our charity sector clients report:

• Increases in stakeholder expectations for internal reporting, alongside more stringent filing, auditing and declaration requirements from regulators.
• Changes to the way charities are expected to quantify outcomes and impacts, to be able to provide evidence of accountability and show how charity funds have been used and allocated.
• Greater demand for resources, with charities looking for ways to optimise efficiencies and augment their cost-saving activities to navigate higher demand for services and reductions or changes in revenue streams and funding opportunities.
• Internal threats, where digital infrastructure and IT assets are exposed to emerging security risks, such as cybersecurity attacks, and where risk management and reduction applies both inside and outside the organisation.

To adapt and progress, charities often need to reinforce the foundational processes they depend on, such as ensuring robust and reliable record-keeping, tax management, and accounting.

From there, a charity accounting team can advise on the best ways to embrace change and approach current challenges head-on without sacrificing established levels of trust.

Key Support Services Available From Our Charity Accountants

As we’ve intimated, accounting and financial advisory support extends far beyond the general requirements of recording revenues, donations, grants and funding, protecting the economic health of a charitable organisation, and submitting accurate, on-time reporting.

Financial expertise can be invaluable in reputation management, where our talented advisers assist with everything from risk assessments and sustainability analyses to verifying that your charity adheres to all regulatory standards and compliance expectations, with accounts and management accounts that can stand up to the most rigorous levels of scrutiny.

Additional charity accounting support that may be relevant to your non-profit organisation could include the following.

Ongoing Forecasting and Budgeting

A common stumbling block for many charities is their reliance on individual, smaller donations or ad hoc grants and funding opportunities, making it difficult to allocate resources, predict anticipated revenues, or set ambitious goals.

Precise budgeting is essential to ensuring charities achieve the impacts they aspire to, where financial planning can involve goal setting, reviews of your financial stability, and creating new strategies to support ongoing and smaller-scale donations to ensure the organisation is viable and sustainable.

In some cases, this could involve comparing funding sources or potential new revenue streams to identify risks and rewards, reviewing eligibility and access to grants relevant to your work, or looking at how to attract new donors and grant providers who prioritise charities with excellent transparency.

Alongside this, meticulous monitoring of overheads, outgoings and expenses, measuring the outcomes and impacts achieved from specific grants or donations, and ensuring that you comply with grant reporting and feedback requirements may all be essential.

Risk Monitoring and Internal Controls

We’ve summarised the risks and threats that affect most charities, and upgrading your internal controls to protect against fraud, misuse of funds, or non-compliance is often a core objective, where you need the confidence that your organisation is not exposed to any potential financial mismanagement that could cause serious reputational damage.

Experienced charity accountants can monitor and identify unusual transactions, highlight possible irregularities, and ensure board members and trustees take full control, implementing the right procedures to keep their finances properly safeguarded and ringfenced where necessary.

Strategic Financial Advisory Support From a Specialist Charity Accounting Team

Alongside the support and financial accounting services above, a charity accountant provides a wealth of experience, independence, and insights, given that they are one step removed from the inner workings of the charity.

Consulting the James Todd & Co team provides access to strategic guidance, knowledge and information, whether you need to discover the best ways to save costs, improve revenues, or grasp all the potential opportunities that may arise.

To learn more about our support as a charity accountant, you are welcome to get in touch or arrange an in-person chat at your convenience.