Charities & Not-for-Profit
Accounts your trustees can actually read and trust.
Small and medium charities and CICs carry the same financial discipline as any growing business — plus a governance layer that has to be right. SORP-compliant accounts, funds tracked properly, and reporting that gives trustees what they’re legally responsible for understanding.
This is a newer part of the practice — said plainly, because trustees deserve a straight answer about who they’re working with.
What it isn’t new is the discipline underneath it. The same approach that applies to a growing business — proper management accounts, funds reconciled to the penny, reporting built for the people who actually have to act on it — applies just as directly to a charity’s books. The accounting principles around restricted funds and trustee reporting are a specific skill set, not a mysterious one, and it’s one this practice is actively building, with the same care that’s gone into every other part of the work here.
Why charity accounting is its own discipline
A charity’s books answer a different question than a company’s.
A company’s accounts exist to show whether it made money. A charity’s exist to show whether the money was spent the way donors and funders were told it would be. That difference runs through everything.
Reporting framework
SORP, not just FRS
The Charities SORP sits on top of standard UK accounting rules and sets out exactly how income, funds, and activities need to be presented — different from a normal set of company accounts, and easy to get subtly wrong if it’s treated as optional.
Income recognition
When is a grant actually “yours”
Money received doesn’t automatically count as income in the year it lands — it depends on conditions attached, deferred income rules, and what the funder actually agreed to. Getting this wrong distorts the whole picture of what the charity can spend.
Independent examination
The right level of scrutiny, not over the top
Most charities under the audit threshold need an independent examination, not a full statutory audit — a real distinction with real cost implications. Knowing which one actually applies, and preparing for it properly, matters from year one.
Governance, not just compliance
The numbers serve the trustees, not the other way round
Trustees are personally responsible for the charity’s finances, often without a finance background themselves. Reporting has to be built so they can actually exercise that responsibility — not just technically correct, but genuinely usable.
Plain English, on purpose
The terms that actually matter — without the jargon wall.
Most trustees aren’t accountants, and shouldn’t need to become one to understand their own charity’s finances. Here’s what the core fund terms actually mean in practice.
Term
What it actually means
Restricted funds
Money given for a specific purpose — a project, a building, a particular group of beneficiaries. It can only be spent on that purpose, and has to be tracked separately so trustees (and funders) can see it hasn’t drifted into general running costs.
Unrestricted funds
Money the trustees can spend on anything that furthers the charity’s purposes — the flexible reserve that keeps the lights on and lets the charity respond to what it actually needs, rather than what a specific grant dictated.
Designated funds
Unrestricted money the trustees have chosen to set aside for something specific — a future project, a reserve. Not legally restricted, but earmarked deliberately, and reported separately so the intention is visible.
SOFA
Statement of Financial Activities — a charity’s version of the profit and loss account. It shows income and spending by fund type, so trustees can see at a glance whether restricted money was actually spent on what it was given for.
Independent examination
A lighter-touch check than a full audit, required for most charities below the audit threshold. It still needs to be done properly and by someone qualified to do it — getting this stage right early avoids problems later.
Built for trustees, not just for compliance
What good charity reporting actually does for a board.
Trustees carry personal legal responsibility for the charity’s finances. Reporting should make that responsibility easier to carry, not harder.
01
Shows funds clearly, fund by fund
So a board can see, without translation, exactly how much restricted money remains, what it’s earmarked for, and whether spending is on track against it.
02
Flags reserves honestly
How many months of unrestricted reserves the charity is actually holding — a number every board should know cold, and often doesn’t until it’s asked directly.
03
Gets the annual return right, on time
Charity Commission filings and accounts prepared to the standard actually required for the charity’s size and income band — no more, no less, done properly the first time.
Worth being upfront about
For larger charities needing a full statutory audit, or highly complex multi-fund structures with significant restricted income streams, the right move may be a referral to a specialist firm or named auditor. Part of doing this well is being honest about where the right level of support sits — including when that’s somewhere else.
