Is your accounting system meeting your charity's needs?
We are often asked by our charity clients to provide advice on accounting software packages. As there is no ‘one size fits all’ approach to this question, our response is to think carefully about your own requirements and what your charity is trying to achieve.
Charities have varied and complex accounting needs. Charities following the Charities SORP must keep accruals accounts and provide detailed analysis of income and expenditure activities. Every source of funding must be disclosed and different activities and campaigns tracked.
Many small charities make very good use of spreadsheets as the basis for keeping accounting records. These are cheap, intuitive to use and readily available. However, this form of record-keeping does not lend itself to charity accounts. Charities often operate many accounts or may have restricted or designated funds. Also, spreadsheets are more suited to receipts and payments accounts rather than accruals accounts.
The main advantage of accounting software is that it is designed specifically for the job in hand. There are many packages available and most offer a good solution for charities, depending on individual requirements. From simple bookkeeping to more advanced functions, including the production of tailored reports, monitoring transactions and financial analysis and performance.
Accounting software obviously comes at a cost which varies depending on the features offered and pricing levels for number of users etc. However, most are paid for by a monthly subscription of around £10-£25 which includes online support and upgrades to the latest version.
You may be aware that some of these packages can be cloud-based. Put simply this means that the programme and, as a consequence, your data is stored externally (ie in the cloud) and accessed from the internet. In recent years there has been a significant increase in the choice or programmes available with many established suppliers offering this technology as an alternative to the more traditional desktop or server-based packages.
We would advise any charity who may be thinking of changing from their current manual or spreadsheet system to discuss their options with their accountant. Not only will this help you to understand its accounting features but also to see the potential benefits to them in terms of time saving and convenience. Of course the software will only be as good as the user makes it so we would recommend full training and set up help is undertaken.
Some factors you could consider include:
• The accounting experience of your charity staff/trustees
• The number of individuals who will need access
• Do they have access to computers
• The complexity of your accounting needs
• What type of information do you require to manage your charity
This should provide a starting point for any discussion you may have with other members of your board or charity staff.
In summary, we would recommend whichever system you choose to adopt that it provides financial data that is clear and useful to you.
Please speak to us if you would like more details about changing your accounting system.
Contact Paul Underwood, Director of Morris Crocker Charities Team on 023 9248 4356 or email pu@morriscrocker.co.uk
24/2/20