How We Can Help
We can help your small charity comply with it's legal obligations by supporting you to produce your SOFA reports using Liberty Accounts online software for charities.
We can also carry out and produce an Independent Examiners Report to comply with Charity Commission Rules and format your trustees report if required.
Please note we can only work with small charities that do not and are not likely to require a full audit.
For us to carry out an Independent Examination your charity must have total income of less than £250,000 per year.
If your charity has income of less than £25,000 per year you don't need an Independent Examination but we can still assist you to produce SOFA compliant accounts to present to your members and supporters.
We prefer to work with charities within a 20 mile radius of our base in Lancashire but may also be able to help any charities further afield who are currently using Liberty Accounts software.
Accounting Guidance For Charity Trustees
If you are a charity trustee you are accepting a level of responsibility which should not be underestimated.
At least one trustee must sign and declare that the charity accounts are correct each year, with particular reference to the areas mentioned below.
Aims and Activities
All charities must be able to demonstrate that their aims and activities are for the public benefit, and must assess and report on this every year at the time they prepare their annual report.
All charities have to register and file accounts signed by at least one trustee with the Charity Commission and in addition those charities that are also limited companies must file accounts with Companies House.
To prevent a conflict of interest between a trustee’s personal interests and duties as a trustee, trustees are not permitted to benefit personally from the charity (although reasonable out of pocket expenses may be reimbursed) and also cannot be employees of the charity.
If you are a trustee and do not act lawfully or in accordance with your charity governing document you can be held personally responsible for any loss caused to the charity.
Trustees are under a legal duty to make sure that their charity’s funds are only used 'in the furtherance of its charitable objects'.
To be able to demonstrate this is the case, suitable financial records must be kept.
There are requirements for charities to:
- keep full and accurate accounting records including accounting for funds
- prepare charity accounts and an annual report
- ensure an independent examination is carried out (for small charities)
- submit an annual return, annual report and accounts to the Charity Commission (and, for limited company charities, to Companies House).
Funds represent the income and expenditure of the charity and there may be restrictions on how certain types of funds raised can be used. For example, donations may be received only on the understanding that it they are used for a specified purpose.
It is the trustees' responsibility to ensure that such 'restricted' funds are used only as intended and are reported correctly in the charity SOFA report. .
The annual report is usually a fairly lengthy and comprehensive document, as charity legislation sets out a minimum amount of information that has to be included.
The report generally includes:
- a trustees' report (which can double as a directors' report for charitable companies)
- a statement of financial activities for the year (SOFA)
- an income and expenditure account for the year (for some charitable companies)
- a balance sheet
- a statement of cashflow
- numerous detailed notes to the accounts (including accounting policies).
There is a set method in place to determine how a charity’s accounts should be prepared and presented.
Unincorporated charities with income below £250,000 may prepare receipts and payments accounts.
All other charities must prepare accounts that show a 'true and fair' view, which is to prepare accounts to include debtors and creditors. These accounts need to follow the requirements of the Charities Statement of Recommended Practice (SORP).