Charities and Not for Profit

Charities and Not for Profit

Are your finance processes and core business systems fit for purpose? 
There are mounting pressures on charities and NFP (Not for Profit) organisations. The financial and trading regulations under which they operate are increasingly more demading, whilst at the same time in fund raising shortfalls continue to blight the sector. This means developing new fundraising techniques and angles, whilst at the same time keeping check on costs, retaining people, and managing both risk and reputation in delivering to beneficiaries.  
We work collaboratively with Third Sector organisations as professional advisors and consultants, sharing our specialist skills. We try to alleviate pressures and improve operational performance. 

We help charities and NFPs demonstrate true value for money by unifying our accounting expertise with leading knowledge of the financial systems and Enterprise Resource Planning (ERP) market – an expert combination of skills to make the most positive impact on your requirements. 

Charities and Not for Profit Support Services  

Fund Accounting  

Does the absence of monitoring funds during the year indicate that your charity has outgrown your accounting system? 
Compliance to fund accounting principles is essential for charities and NFPs. Financial and management accounts must be clear on their understanding funds, with fund accounting principles being a cornerstone of Charity law, not simply a bookkeeping requirement.  
Fund accounting splits balances into 4 different types of fund, depending on the purpose of the donation: 
  • Unrestricted or General Funds  
  • Designated Funds  
  • Restricted Funds  
  • Endowment Funds  

How Moore Insight can support your organisation 

We understand your current position and work with you to put into place frameworks that will allow for the better monitoring of financial performance, the demands on each type of fund and the funds needed, to help you set a robust Reserves Policy.  
If funds are not monitored correctly, the level of general or restricted reserves may not be understood during the year. Perhaps overheads are not apportioned until the year end, leading to the impression of having more funds available than in reality. Having the right systems in place helps ensure compliance with the Charity governance. 

We work together to create financial processes to ensure you fulfil the increasing and ever-changing financial reporting requirements.  

Donor reporting 

Donors often request reports to show how funds have been spent. Donor Reports will not necessarily correspond in format with your year-end accounts so there is a need to ensure the efficient identification of the expenditure connected to each restricted fund at any time during the year.  
We work with you to ensure your system allows allocation of income and expenditure to a particular department, project or cost centre in a way that is clear to donors and Trustees alike.  

VAT and the Charity Sector  

Charities must register for VAT with HMRC if its VAT’able sales are over the VAT threshold. The Charity must then charge VAT on goods and services, requiring a VAT return every 3 months. A charity with VAT’able sales below this threshold can choose to register for VAT voluntarily to reclaim input VAT from purchasing supplies.  
Our team work with you to create structures and processes, together with the right systems, to prevent financial misrepresentation and VAT penalties by having proper financial systems in place. 

VAT relief for charities 

Even if they’re not registered for VAT, charities can ask their suppliers to charge them the reduced or zero of VAT on certain goods and services. Our experience in this sector will ensure the full and proper accounting, ensuring the best value for money with your accounting procedures.  
The VAT landscape for charities and NFPs is never constant with its own potential for pitfalls but also opportunities. We can help you understand and manage these.

Charities SORP (FRS 102) Revenue Recognition 

The previous UK GAAP was replaced by a single standard from 1 January 2015, requiring all financial information be prepared in accordance with FRS 102. 
Consideration of revenue recognition should be simplified by a simple and coherent set of recognition criteria and Moore Insight will work alongside you to confirm your adherence to FRS 102 and ensure your recognition policies are aligned to your processes.  

IR35 and off-payroll workers  

The new IR35 rules, intended to be effective from 6 April 2020 but now postponed until 6 April 2021, will impact contractors working through a personal service company (PSC), recruitment agencies and all large and medium-sized private sector end clients. 
If your charity engages workers through an intermediary, you may become responsible for assessing employment status and applying PAYE to their remuneration. You will need to review key points before 6 April 2021 to prepare for these new rules. 

Grants accounting 

Charities can be Grantees and Grantors. Either way, how you treat these grants in your accounts is vital, as many parties, including the grant making bodies, may require to review the accounts closely.  

Gift Aid and Record Keeping  

Each year, HMRC selects a number of charities and CASCs for audit to ensure that the Gift Aid scheme is being properly applied. Charity Trustees are ultimately responsible for ensuring the correctness of claims. Therefore, to achieve that result, they have an obligation to ensure that appropriate systems are in place. 

Gift Aid Small Donations Scheme  

Charities can claim up to £2,600 in a tax year under the Gift Aid Small Donations Scheme (GASDS) allowing charities to claim Gift Aid on small cash donations. They have different record keeping requirements and a different claim timeframe than normal Gift Aid.

Our team use their expertise in this area to implement the correct procedures and processes to ensure the specific stipulations of HMRC are in place for fast and accurate reporting.  

Cybercrime and protecting your charity from fraud 

Charities are increasingly being targeted by criminals, due to weaker systems and controls together with a lack of internal knowledge about cybercrime and fraud. Accounting systems and processes must have strong controls in place.  

Protecting your charity 

We work closely with you to assess your current processes and systems and their security weaknesses and ensure we:  
  • Create processes and procedures for staff, volunteers and Trustees  
  • Work with trusted IT and Software partners to ensure strong firewalls, encryption and IT protocols  
  • Assist in establishing a Cyber-fraud response plan 

What we do


ERP and Digital Transformation

Business Change

Financial Management

How can Moore Insight help you?