The Charity Accountant - Bookkeeping

Bookkeeping

Bookkeeping is sometimes considered as a lesser role than accountancy or perhaps its accountants who just think they are more important. Whichever way around it is the message to take away is that’s wrong.

Bookkeeping is the bedrock of accounts preparation and good reporting. It is very difficult to prepare accounts, reports or balance sheets if you have no information to put in them! Even if you have the smartest, slickest templates for your reports, without accurate, timely bookkeeping there is not much point in having templates at all.

The basics of good bookkeeping are actually very simple. You need to have an electronic system that allows you to easily enter dates, invoice numbers, descriptions etc. another essential tool for your electronic system is data manipulation. Most accounting software packages are specifically targeted at accounts which is perfect if all you want from your software is bookkeeping and reports.

We use excel spreadsheets for a couple of good reasons.

The first is its very cost effective, once you have bought the initial package you have that for as long as you need with no renewal costs (unless you are now on the pay monthly deal offered by Microsoft).

The second reason is just how adaptable excel really is. It can be used to store an unlimited amount of data whilst still providing the tools to quickly and easily dig out the information that you want. Excel is not just useful for finances, you can use it for monitoring numbers of people helped, website visits, contact details the list of uses is almost endless! Some more examples include monitoring key words on your website, monitoring training records and so on.

So, excel is our preferred software of choice for small charities. Once you reach a certain size however you will find specially made accounting software essential for quick bookkeeping. But remember size is not necessarily a measure of expenditure or income but a measure of how many transactions your charity needs to process.

Internal controls and procedures

Another essential tool for bookkeeping is a solid internal controls and procedures policy. There is more information on our website including guidance documents provided by the charity commission. But the key is make sure the procedures are reasonable and that the controls are effective. Internal controls and procedures is such a complex topic that I will dedicate another article to this at a later date.

So far we have only scratched the surface of bookkeeping but there is plenty of time to say everything that needs to be said! Stay tuned.

Bookkeeping

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