Accuracy beyond the balance sheet

Charity accounting is fundamentally different from commercial business accounting. It is not just about profit and loss; it is about stewardship and accountability. At Armstrong Watson, we understand that your accounts are a public-facing document—seen by the Charity Commission, grant funders, and donors alike. We help you ensure that your financial reporting is transparent, compliant, and reflective of the incredible work you do.

Expertise in the charities SORP

The Statement of Recommended Practice (SORP), based on FRS 102, is the "rulebook" for charity accounts. Navigating its requirements can be overwhelming for volunteer Treasurers or busy Finance Directors.

• The Trustees' Annual Report (TAR): We don't just crunch numbers; we help you ensure your TAR meets statutory requirements, linking your financial data to your charitable objectives and impact.
• Accruals vs. Receipts and Payments: We advise smaller charities on when they can use the simpler "Receipts and Payments" basis and when they must transition to full "Accrual" accounting (required for all CIOs and charities with income over £250,000).

The complexity of fund accounting

One of the most common pitfalls in charity finance is the misclassification of funds. We provide specialist guidance on:

• Unrestricted Funds: Income you can use for any purpose in furtherance of your objects.
• Restricted Funds: Grants or donations given for a specific project that must be tracked and spent accordingly.
• Endowment Funds: Capital held by the charity which may be permanent or expendable.
• Designated Funds: Earmarking unrestricted reserves for future projects to show transparency to donors.

Digital transformation: cloud accounting for charities

Is your finance team still reliant on spreadsheets? We help charities migrate to cloud-based systems like Xero, Sage, or QuickBooks, configured specifically for the third sector. This allows for:

• Real-time tracking of restricted fund balances.
• Automated "Partial Exemption" VAT calculations.
• Integrated expense management for staff and volunteers.