Income Services

This page originally focused on online income services only. A short section on offline income services was started November 2014.

Online Income Processing Options

There are a number of ways of getting money processed as a result of someone making a decision to ‘buy’ from your website (or via seeing a charity ad elsewhere):

  • At time of writing (June 2000), it is common for all types and sizes of organisations to require a form to be printed off and posted, or a phone call, with cheque or credit card payment being processed in ‘standard’ ways.
  • Use a Payment Service Provider (PSP) facility, where your website connects through when someone wants to make a payment. The money goes to their account, and you get paid typically 45 days later. (Information should be collected on your site so you respond before then!). Operate on a set-up fee (sometimes free) plus a percentage per transaction which can be double the offline charge.
  • A ‘secure server‘ within your web set-up which allows taking credit/debit card details online, and you then feed in manually to your normal card processing arrangements.
  • Real online card processing, through a facility like ePDQ (see Barclays), with a live or batch connection to the card issuers/clearers. Usually a monthly fee, lower transaction charge than PSP – try to negotiate same as your offline arrangement.
  • Your own online processing facility, connecting through to the banks system in a similar way to BACS. Only for the largest, and even then probably not yet.

Online Income Tools, Services, Apps

You may want to investigate how these facilities manage or link in to Gift Aid processing. Note that some services are promoted as “free” but check what this means, as the phrase can ignore administration charges or cuts from Gift Aid, for example.

  • Charities Aid Foundation (CAF) can collect donations over the internet in various ways.
  • Charity Checkout online payment processing.
  • Donate is a mobile tool, originally designed to get guests giving at charity events  etc. Run by charity National Funding Scheme.
  • PayPal has a simple Donate button as part of its solutions for charities.
  • Rapidata Services has some online fundraising services as well as direct debit facilities.
  • SnapDonate (new autumn 2014) is an app which connects with JustGiving via scanning a charity logo.
  • Technology Trust has various fundraising related online (and offline) services, including bulk email, card processing.

The open source add-on to the CiviCRM platform, CiviContribute, may be available. While coming from an American base, they are trying hard to internationalise it.

Also see Membership Systems, as increasingly fundraising management processes are integrated into a wider CRM (customer relationship management) function. Also check Online services for Event Management.

Platforms, giving portals

Also see Fundraising Resources page for sample charity websites, ‘shop and give’. Make sure you check what set up costs, commission on Gift Aid claims and/or transaction fees are charged.

  • bmycharity has closed (was commission free donations facility for UK charities).
  • Charity Choice web directory provides an online donation facility for registered charities.
  • Charity Giving, another online giving site, is operated by the Dove Trust, a charity which has been providing fundraising support since 1983. Lower charges than most.
  • everydayhero “consumer giving” website from fundraising software company Blackbaud also has facilities for charities to build fundraising websites.
  • Givey.com Encourages individuals to share a photo, video or any link that will inspire others and give to charity. Projects and community groups as well as charities.
  • Global Giving “Projects on GlobalGiving.co.uk are screened to ensure they meet a genuine charitable purpose, in areas such as education, health, economic development and the environment.”
  • Golden Giving Only charges card transaction fees, through support by various philanthropic partners.
  • iRaiser Based in Paris (suggested by Shelter Scotland’s digital manager in an article Oct. 2014).
  • JustGiving The most well-known online platform for individual charity fundraising. There is an annual membership charge, unless you sign up for the Basic account. They also have a crowdfunding facility. Possibly also a ‘white label’ version for use within a charity’s own web page.
  • Localgiving aims to enable philanthropic giving to small local charities and community groups in the UK. It is a social enterprise owned by two charities, and every local charity listed is vetted by their local Community Foundation. There is an annual fee.
  • Make a Donation No commission charges due to support from businesses.
  • Makerble Launched autumn 2014, focuses on projects and showing the change donors can make.
  • SmartGiving Fundraising pages and charity accounts (claiming Gift Aid before the account holder allocates the money). A registered charity.
  • The Big Give.
  • Total Giving was launched Dec. 2013 by Raise your Profile using its Donation Manager software. No fees, apart from PayPal processing.
  • Virgin Money Giving is another individual fundraising platform, set up as a not-for-profit. There is a set up fee.

Community shares, Crowdfunding

  • Buzzbnk is an online crowd-funding platform for social ventures. Merging with Trillion Fund, the renewable energy crowdfunding platform, July 2014.
  • Crowdfunder “a simple way for people to raise money, awareness and support for great ideas”.
  • Spacehive “crowdfunding civic projects”.
  • Community Shares: Community Shares Unit (England) – all community share offers that meet national standards of good practice can feature on their Microgenius web pages. Also see Community Shares Scotland.


General Payment Services

  • Barclaycard Business Services ePDQ is their online payment facility for approved merchants.
  • NetBanx.
  • PayPal is a little different to the others. Accepts credit card payments very quickly, but there are some restrictions on what you can then do with the money.
  • Planet Payment Phone 0800 027 3636.
  • PayPoint. (previously SECpay).
  • SecureTrading provides ‘real time’ processing of payments by credit and debit card. UK based. Rates for charities (Autumn 04): 1% of each transaction plus £150 per year.
  • WorldPay is quite widely used by UK charities (which are charged 1% on credit cards, no annual fee). Doesn’t meet full accessibility requirements, according to reports. Part of Royal Bank of Scotland Group.

Cards and payment facilities

Various banks provide branded debit/credit cards for charities – we haven’t collated details so far.

  • Embedded Payments (previously CharityCash) provides retail payment solutions via Post Offices, PayPoint etc., also supporter donation cards, mobile cash donation engine.

Accountancy Services

Basic issues

For the voluntary organisation which is a registered charity or company, conforming to accounting requirements imposed by the charity SORP (developed by the Charity Commission with sector professionals) and/or company law (largely overseen by Companies House) can be one of the least rewarding aspects.

There are Community Accountancy schemes dotted around the country.

Failing the above, a number of specialist units in small to large accountancy firms can save you money in the medium to long term. They can help develop systems which can cope, and ensure your good intentions aren’t undermined by complexity. Equally there are some who only have a superficial understanding who will still pitch for your business. In this field, it is pretty essential to take up references (from some organisation in a closely related field if at all possible) if you are inexperienced or unsure. All those below, with one exception, are qualified to audit accounts for any type of organisation.

The one exception relates to ‘independent examiners’, defined under the charity SORP as being able to provide an alternative to a full audit for those charities with an income of under £250,000 in England or Wales, £100,000 in Scotland (as long as they aren’t limited companies as well). There is an Association of Charity Independent Examiners. Plus we reproduce an article on this subject from Gareth Morgan, who originally launched ACIE.

Audit/accountancy firms

The UK 200 Group of small to medium sized chartered accountancy firms has launched a charities group, which provides a pool of expertise for its members. This should help increase the understanding of particular charity issues within those firms. Contact the UK 200 charities group via 01252 333511.

The list of members firms at the Charity Practitioners Forum is also worth checking.

Some audit/accountancy firms we know best

  • BDO The useful charity newsletter is mailed to clients and often others who express an interest. Contact Don Bawtree or Kate Kirkland (the latter is their governance expert). Charity Unit, 8 Baker Street, London, W1M 1DA, phone 020 7486 5888, email: don_bawtree@bdo.co.uk
  • Crowe Clark Whitehill (was Horwath CW) The charity team is led by Pesh Framjee, one of the most familiar faces at charity finance events, and he knows his stuff. Pesh is Special Advisor to Charity Finance Group and has produced many briefing papers for CFG which can be obtained from the web site. The firm runs the CFG and ACEVO helplines and the non-profit sector accounts for over 25% of the its business. St Bride’s House, 10 Salisbury Square, London, EC4Y 8EH, phone 020 7842 7100.
  • Peter Gotham and Simon Erskine and their specialist Not for Profit Team (formerly Gotham Erskine) are now at Macintyre Hudson, New Bridge Street House, 30-34 New Bridge Street, London, EC4V 6BJ, phone 020 7429 4100. They continue to provide services for small to large charities, including management and insolvency advice. A monthly newsletter is available from the website.
  • Sayer Vincent Work closely with Directory of Social Change on Charity Accountants Conference, training courses and publications; produce newsletter. Some charity accounts information on the website, which is continuing to develop. Specialist IT and management consultancy services. 8 Angel Gate, City Road, London, EC1V 2SJ, phone 020 7841 6360, email: info@sayervincent.co.uk. Also Bristol office: Kings House, Orchard St, Bristol, BS1 5EH, phone 0117 905 5002.

Others



Management accounting, Support

  • Accounting Solutions for Charities Run by Steve Brown, who has 20 years voluntary sector experience, including 10 years at Finance Director level. A range of financial management support to organisations in the London area.
  • Peter Howlett ACMA. Independent financial consultant with 10 years financial management experience in the voluntary sector. 34 Bartlemas Rd, Oxford, OX4 1XX, phone 01865 251161, email: PeterHowlett@Moneyinsight.org
  • Graham Taylor A specialist Charity Finance and Management service dedicated to charities for more than 20 years. Phone 020 7538 1893, email: graham@gtcharityfinance.co.uk
  • Nigel Tinsley. Annual reports and accounts to SORP standards, Monthly and quarterly management accounts, Budgeting, Cashflow forecasts etc. for voluntary sector in West Midlands area. 82a Wrottesley Road, Wolverhampton, WV6 8SH, phone 01902 750301, email: nigel.tinsley@virgin.net

Payroll and Bookkeeping Services

The internet opens up new opportunities for payroll services. You may still find it useful to check whether a local CVS does this for groups in its area (for a fee) but potentially it is cheaper and more flexible over the web. CASH-online advises small charities and voluntary groups to use a payroll service and save a considerable administrative burden. If you want to do it yourself, see our Payroll Resources section.

Mainly accountancy

  • Charity Accountancy Services Accounting and back office services for charities up to £1 million turnover. Based in London.
  • Community Accountancy Service Ltd is in Manchester.
  • Daniel Hull of High Peak Bookkeepers has a charity background and is offering bookkeeping, payroll and office services in Derbyshire/Manchester area. Phone 07826 111964.
  • NfP Accountants is a small accountancy firm in London dedicated to providing financial management support for small charities.
  • CASE – Community Accountancy Social Enterprise – is/was trading arm for Community Accountancy Self Help, but problems with website at March 2014 indicate it could be defunct. Provided back office accountancy support to community groups across London.

Mainly payroll

Voluntary sector specific

  • Scottish Training Foundation Payroll A Glasgow based charity providing a comprehensive payroll service to small businesses, charities and voluntary organisations. Phone 0141 572 4326.
  • Charity BackRoom is run by Voluntary Norfolk and provides a payroll service to charities and social enterprises across England. Phone 01603 756726, email: enquiries@charitybackroom.org.uk

Others

VAT advice

Also see Tax Issues page.

  • Centurion VAT – South Wales and West.
  • Liaison now appears to be entirely focused on NHS VAT (used to have good charity knowledge too).
  • The VAT Consultancy Offices in Hampshire and London.
  • The VAT People A VAT consultancy based in Stockport. Charities page.
  • VAT Advice Les Howard is based in Cambridgeshire and has long experience, including reclaims for various churches and charities, especially on new builds.

Accounts Packages

Introduction

Based on a round-up of software suitable for voluntary organisations which was started in 1996, updates include a major revamp in connection with an article in NGO Finance (March 2000). A lot of the issues tend to be put in terms of the charity SORP, which requires tracking of Restricted Funds plus a Statement of Financial Activities rather than a Profit and Loss account. However, most of the same issues apply to any voluntary organisation with project funding. See our Software Intro page for more explanation on this and software trends.

All software runs under Windows unless stated otherwise. Note that consolidation amongst suppliers is growing – contacts, package names and availability may have changed recently.

Budgeting

Many voluntary organisations will use spreadsheets to help them put together budgets. However, these do have problems (see below), and putting budgets into an accounts package is often time consuming. So there is some space for specialist software.

Checking Spreadsheets

Spreadsheets are often used for creating budgets, producing tailored management accounts (with data linking through ODBC or similar) and perhaps grant or project tracking. Not generally recommended for any but the smallest/simplest organisation for bookkeeping.

As well as the rawness of the basic screen format putting many people off , there is huge scope for errors to creep into spreadsheet design. For example summing functions which miss out lines, or links between pages which pick up the wrong figures, for instance. Error checking isn’t easy, although there are some tools available which help – we haven’t got current links so do a web search.

Accounts for the Mac

We have been asked on various occasions to provide more info on accounts packages for the Apple Mac. Unfortunately, there is a limited range available and none with a sector specialism as far as we know. You can try:

  • Do$h Cashbook – see below.
  • MYOB is no longer available. Mamut, who have bought the business, have released AccountEdge and AccountEdge Plus.
  • My Business has now got a Mac version. See Band 1.

Open Source Accounts

At time of writing (Nov ’03), there isn’t really any open source accounting software suitable for small to medium organisations. GNUCash is for personal finances, while SQL-Ledger is web/server based so for the high-end. Both are American. There are supposedly projects in progress, but its likely to be some time before anything useful appears for UK non-profits.

Update June ’06 – we note that Turbocash seems to have become a bit more established as open source – see ‘Other possibilities’ under Band 1 below.

Band 1 – Entry level

Finance Co-ordinator from Data Developments ‘software for churches and charities’, has been around since 1986. Designed to cope with Fund accounting, SOFA reporting, etc. but not VAT. The double entry bookkeeping convention is visible but doesn’t require prior knowledge. £159 for an organisation-wide licence, at autumn 2013.
– Data Developments, Wolverhampton Science Park, Stafford Road, Wolverhampton, WV10 9RU, phone 01902 824044

DO$H has become part of Mamut – their Cashbook (PC and Mac) is still available. The non-VAT Lite version appears to have gone but still provides a simple receipt and payments package, with a neat export facility (produces an exact replica of reports in spreadsheet, via CSV file) allowing report tailoring. The small business version is recommended by The Princes Trust and Lloyds TSB for commercial start-ups. £29-50 at Jan. ’09 – trial version available to download.

Kubernesis no longer supply their software, written specifically to work with Charity SORP accounting requirements, but will support existing users.

Paxton Charities Accounting With a background in providing accounting software for armed forces service funds, which now have to comply with the charity SORP, Paxton Computing has released a SORP accounting package for wider use, starting from £195 for single user (autumn ’07). It has some nice features, such as Gift Aid management in the Donations section, configurable ‘favourites’ buttons and up to 8 different VAT rates, as well as SORP reporting built in. Plus the type size adjusts automatically with the window size, making it good for those with poor sight. We did find some rough edges in the review copy but annoyances rather than significant issues. The lack of a sales ledger given the good VAT facilities is a bit odd (apparently on its way), and the report export functions could be easier to use (no general export function). Typical user: smallish charity with a need for Fund accounting and someone (treasurer?) trained in traditional bookkeeping.
– Paxton Computers, 15 Kingsway, Bedford, MK42 9EZ, phone 01234 216666.

Quick Books Focus now (2017) on online version, but desktop edition still available, and may be adequate for smaller charities. Following text may be out-of-date! An amazingly complete package for around £250 – just add payroll support and you have everything a small organisation could want. You can categorise costs (and income) in two ways (Customer Job, and Class) which could be adapted quite easily for SORP requirements. VAT rates can be customised. Navigator screens are easy to follow, while the alternative drop down menus suffer from too many options. Export facilities (to Excel) have been much improved in recent Pro versions. As Reports can be tweaked quite easily, most needs can be met within QB, though a SoFA would take time to set up. A customised edition for UK non-profits did appear but is probably no longer available (advanced budgeting, membership, donation tracking and fund accounting features). Don’t get confused (in non-UK reviews) by the American QB extension called Nonprofitbooks which won’t work here. Typical user: small organisation with no finance staff.
– Sales phone line 0845 606 2161. Get a demonstration version, and if you like it, phone/pay by credit card and get a code to turn it into a fully working version.

Systematics Standard edition including payroll, usual price £175, is offered free to charities and the required £95 annual support fee includes any software updates. It doesn’t have the Cost Centre analysis features of the professional edition, which many would want, but a 40% charity discount makes that only £135 for the usual set of modules (Sales, Purchase, Nominal and Cash Book). Work is being done on making SORP reporting more straightforward.

TAS Books now part of Sage. Haven’t had a chance to look at the actual product for a while, but for its price, very flexible and integrates with Microsoft Office. Slightly more sophisticated than QuickBooks, and has gained various UK awards and accreditations. Now has Sage import facilities, is due to develop BACS (electronic payment) and has already demonstrated e-commerce facilities via XML web-based protocols (eBIS). Starts at £150 for single user (incl VAT + p&p), with a 60 day money back guarantee. Now part of the Sage company. Typical user: Small organisation with someone doing finance part-time.
– TAS Software, phone 0845 245 0220, email: sales@tassoftware.co.uk



Other possibilities

The Big Red Book (based in Ireland and available in Gaelic). Screen layout and reports are based on the traditional manual ‘red book’, so anybody familiar with that approach will find this very easy to use. Not sure analysis will be up to the needs of many charities, but if the idea sounds attractive, take a look. Starts from £95, and have said they will give discounts to registered charities.
– 1 Clonskeagh Square, Dublin 14, Ireland, UK phone 0161 926 8822, email: bigred@iol.ie

My Business is an integrated, easy-to-use, Bookkeeping, Diary/Project and Contact Management program written for small businesses. From £39-99 to £149-99 at spring 03, plus support from £39-99 to £69-99 , it is good value. But analysis is limited, and doesn’t appear at all tailorable. May be useful to very small organisations, especially if the non-finance facilities fill a gap on your computer. Payroll module available.
– My Business Ltd, Churchill House, 12 Mosley Street, Newcastle, NE1 1DE, phone 0845 1 20 30 40, email enquiries@mybiz.co.uk

Omni Accounts no longer available in the UK? (there is a South African website).

TurboCash is released as ‘open source’. It can be downloaded from Sourceforge for free.

Band 2 – cost up to £1,000

Sage Line 50 Probably the most widely used package in the sector, but this doesn’t mean it has any particularly relevant features. It is more that it is widely known and available, and has been around for sometime in various guises. Rudimentary department analysis, still has quirks such as 3 sorts of date fields with different default values, and not very friendly report writer (at version 6). But ODBC means you can do ‘live’ links to a spreadsheet such as Excel. Typical user: ‘professional’ bookkeeper and spreadsheet capable accountant or treasurer, to do monthly reporting. Basic cost, without invoicing facility, £395. 30% charity discount.
Sage, Sage House, Benton Park Road, Newcastle-upon-Tyne, NE7 7LZ, phone 0800 447777.
– See Suppliers section below for charity specialist resellers: Intelligent Solutions, Avant-Garde.

Access Accounts – Foundations See Band 3 – Horizons – for fuller details. This is largely a cut-down version of that, with limitations on analysis levels and length of code lists, but still can build up via extra modules, including Project Management, at only £100. Basic cost – £595, 25% charity discount. Note, autumn 03, that a ‘charity accounts production solution’ has been produced, ensuring charity SORP compliance, with full funds analysis and extensive annual report info. Typical user: cash-strapped organisation bent on growth.
– Contact Access Accounting for resellers (make sure you get one with relevant knowledge). The Old School, Stratford St Mary, Colchester, Essex, CO7 6LZ. Phone 01206 322575, email: info@access-accounts.com. See charity web pages. Also Edinburgh office, phone 0131 317 7700, email: info@access-scotland.co.uk, and Dublin, phone 01668 4991, email: accessac@indigo.ie

Pegasus Capital Gold Good analysis features, built-in report writer, strong commercial pedigree, various add-ons. Typical user: small to medium organisation with some commercial activity. £800. Web site Sold via resellers.

Band 3

Costing more than £1000. Analysis much better than Bands 1 or 2. Allow for some consultancy/installation costs. Ongoing support (preferably including upgrades) is a good idea, otherwise changes in requirements or regulations could be problematic. All are ‘modular’: Purchase and Sales Ledgers, and usually Cash Book, are separate. Prices are for single user unless otherwise stated.

AccountView Team 2 user Nominal/Sales/Purchase Ledger system for £1395, Project Costing £995. Unlimited number of companies, cost centre accounting. Loads of other modules, such as Activity Based Costing, Transaction Import (to link with membership, for instance). This European package seems to have dropped the UK version at summer 2015 – the website redirects to VISMA in the Netherlands.

Access Accounts – Horizons A fully featured package with good reporting, analysis and import/export facilities, but quite a reasonable starting price and winner of awards. As many chart of accounts (= companies) as you like, effective use of Windows and good drill-down. Latest versions run on 32 bit systems Windows or PowerPCs (Macs). Typical user: small to medium organisation with ambitions (as can build up facilities or move on to Dimensions – see High-End). £1495 for single user bundle, including Sales and Purchase ledgers, Nov 99, also 25% charity discount. Extra modules and users at £450 each, including Project Management, KPI. Also Transaction Broker module, allowing interfaces to be set up with just about anything. Crystal Reports Pro is extra.
– Contact Access Accounting for resellers details – Charity/NFP web pages. The Old School, Stratford St Mary, Colchester, Essex, CO7 6LZ, phone 01206 322575, email: info@access-accounts.com. Also Edinburgh office, phone 0131 317 7700, email: info@access-scotland.co.uk, and Dublin, phone 01668 4991, email: accessac@indigo.ie

Arrow Financials Comparable with Access Accounts, but claimed to be cheaper, starting at £400 per single user module with support charged at 12.5%. Fully scalable and upgradeable, ODBC and SQL compliant, can define own input and print screens. Used by a number of high profile non-profits in its native Australia. Not sure of current UK distributor with sector experience (at 2014).

Pegasus Opera II, 32 bit software, with 2 analysis ‘segments’. With a new new Advanced Nominal Ledger option (Mar 03) with nominal account, cost centre, project and department analysis, plus user definable views, this may now be a suitable product. Typical 10 user system £2500 for system manager, plus £600 per module (Mar 01). Phone 01536 495000, email: mailbox@pegasus.co.uk

Sage Line 100 Unfortunately this is not a big brother version of Line 50, but a completely different accounting package. It does have an import facility for Line 50 and increasingly the Windows versions look similar. Has greater analysis capabilities (3 character Department and Cost Centre codes, as well as alpha-numeric nominal). Check for relevant add-ons such as Enterprise MRM – see Membership software page. Note that a complete re-write of the program using Microsoft .NET architecture was announced March 03, which will have impact on the modules – it also adds the electronic eBIS-XML financial document exchange system. Typical user: medium-size organisation wanting safety but some flexibility. Financials ‘bundle’ starting from £2500 including Crystal Reports, 10% charity discount.
– See Software Suppliers list below for specialist charity resellers, including Intelligent Solutions (have developed an Excel-based SOFA reporting facility), Avant-Garde.

High End

With a 2 user special ‘bundle’ for Great Plains Dynamics now starting at £4500, the cut-off from Band 3 is becoming less clear. At this level, it is important to know what modules include and which you are likely to need in the near future. They all require careful setting up to realise their potential and can be extensively customised for different users and areas of activity. Some larger audit firms have specialist consultants, although whether they liaise with their charity experts would need to be checked.

Access Accounts – Dimensions (the next step on from Horizons, under Band 3). From £3900. Client/server version with great flexibility in configuring screens, field names, etc.

Exchequer A full suite of business modules including Commitment Accounting and e-Commerce. See their Charity page. Customers include The Samaritans, Wildlife Trusts, Compassion in World Farming.

OpenAccounts The package used by professional accountancy body ICAEW, PDSA, St Vincent de Paul Society, Hospitaller Order of St. John of God (Ireland) and others. Became part of COA, now Advanced Business Solutions– see their Charity/not-for-profit pages.

Microsoft Dynamics (previously Great Plains) Was somewhat taking over from Sun on the more sophisticated/medium to large charity requirements before it became part of Microsoft. Designed totally for the Windows environment and SQL based. Seven analysis segments, plus FRX drill-down reporting tool. Touchstone is a reseller – see Suppliers list below.

Navision Financials Used by Woodland Trust, Archbishops Council, Diocese of London, amongst others. Now part of Microsoft Dynamics, so these contact details may be out of date: Elstree House, Elstree Way, Borehamwood, Herts, WD6 1SD, phone 020 8207 4141, email: sales@navision.co.uk

PS Financials Charity users include Save the Children Fund, Women’s Royal Voluntary Service. Stated strengths are: SORP and SoFA reporting, Automation of partial VAT recovery, Restricted and unrestricted fund accounting, Web reporting for trustees and remote users, Valuing volunteer input, Easy integration to membership, fundraising & other operational systems. Buy direct from the software authors. 7 The Forum, Minerva Business Park, Peterborough, PE2 6FT, phone 01733 367330.

SAP Business One (Baby SAP). Broadgate Infonet reckon they can supply a 2 user solution installed for under £8,000 to the Charity/Not for Profit sector (at Feb ’09). SAP Business One can report on Restricted, Non Restricted Funds, SOFA and SORP, and has up to 5 different levels of analysis against one GL Code – project, cost centre, department, profit centre etc.

SunAccounts Very solid and well-respected package. Loads of analysis features, very powerful recording and reporting once you’ve got it set up, but does require that initial effort. Not for the novice. See Resellers listed under Software Suppliers below. SunSystems now part of Infor.

Well at the top end

Agresso, now part of Unit4. Clients include British Museum, Salvation Army, Wellcome Trust, Age Concern, Jewish Care. Pricing – dependant on modules required, though typically starting at £50,000 +, for an integrated solution. Phone 01275 377340, email: sales.support@agresso.co.uk

Exact

Accounting Software Suppliers

This listing of accountancy software re-sellers for specific packages was a separate page on the old VolResource site.

AccountView Resellers

– Rowanberry Consultancy Ltd, 37 Sandy Lane, Maybury, Woking, Surrey, email: rcl@rcl-systems.co.uk Website. They point out that “AccountView is suitable for charity organizations as it is a very flexible accounting package with the capability of users constructing their own summarized financial reports”.

Sage, Sun, Great Plains

Computercraft, a democratic business, has been reselling SunAccounts since 1987. Phone 020 7284 6980, email: info@computercraft.co.uk

Foundation Systems – business merged out of existence, summer 08? Claimed to be the largest non-profit Sun supplier. Clients include Princes Trust, St Johns Ambulance. Phone 020 8238 6444, email: marketing@foundationsystems.co.uk

Lake Financial Systems SunSystems reseller for more than 10 years. Various charity case studies (in pdf) on the web site. Stable Mews, The Beechwood Estate, Leeds, LS8 2LQ, phone 0113 273 9303, email: info@lake.co.uk

Sapphire Systems is another Sun dealer with charity clients. Head Office: 31 Lombard Street, London, EC3V 9BQ, phone 020 7648 2000. Also in Manchester.

Accountancy Software Introduction

Starting points

Community Accountancy Projects are useful resources, where they exist. One of the most active is Community Accountancy Self-Help (CASH) which operates in west London. Its web site includes a variety of factsheets which may be helpful.

User Groups

  • Sage Charity User Group. Sage Line 50 (which used to be called Sterling) is perhaps the most widely used in the sector, with Line 100 less popular but growing (perhaps for the membership and other useful add-ons available). The User Group is independent but serviced by Intelligent Solutions, who are specialist Sage Solutions Dealers. See Suppliers for contact details.
  • Sun User Group. Special Interest Group of Charity Finance Group – see Helplines/Professional bodies.
  • Great Plains Dynamics. Charity User Group run by Tate Bramald – see Accounts Packages.

IT survey

The Charity Finance magazine/Kingston Smith IT survey, undertaken April 1999 and published July with the magazine, found that Sage had over 40% of the accounts software market for those with turnovers up to £5 million, but no distinction was made between the rather different Line 50 and Line 100 Sage products (or indeed Instant Accounting). Sun was predominant in the £5 to £10 million range (over 30%), with a good showing in even larger organisations. Pegasus got an overall 6% share. On the other hand, 46% used none of these product ranges (no other packages mentioned in the survey report). Microsoft Excel spreadsheet facilities were used by a quarter to produce management accounts (as opposed to financial accounts used for audit purposes etc.) but Sun users didn’t need to resort to such ‘add-ons’.

Accountancy Software Issues

This section (previously a separate page on the old site) is based on a paper produced for Charityfair 96 – Accountancy Software Challenge, updated and extended. It covers:

  • basic terminology
  • why accounting in the charity/voluntary sector is different,
  • why accounting packages can be a help, but aren’t always,
  • relevant trends and future developments in software,
  • dilemmas in software choice.

Terminology

Every software supplier tends to develop their own use of words which can cause some confusion when discussing facilities or ease of use. In SunAccounts for instance, a Journal refers to the normal way of entering data, while this would be an exceptional item in many other packages. We prefer to refer to the process of entering a complete accounting record (e.g. NatWest cheque for £50 made payable to Kim Bloggs, for summer playscheme expenses) as a Transaction.

Chart of Accounts is the accounts structure, made up of account codes and/or names, and may incorporate further analysis (e.g. into Projects, Departments or Funds). If you are used to a Cash Book or other manual record with columns, think of them as the column headings, with Project analysis etc. requiring separate books or ledgers. Codes are usually numeric with the sequence being important in creating reports and setting a logic (although in isolation such codes can be meaningless). Some people prefer to have alphanumeric codes to make them more memorable, but not all packages will support this. Also called nominal coding.

Trial Balance If you don’t know what this is, for most packages you will need your auditor or other accounting expert to advise you on the Chart of Accounts and analysis issues.

Important charity finance terminology
– SORP (Statement of Recommended Practice). The accounting regulations as part of Charities Act 1993 brought this into effect from 1st March 1996 for all registered charities. This requires certain principles to be followed in compiling annual accounts. ‘Minor’ revisions due to be agreed summer 2000.
– SOFA (Statement of Financial Activity) under SORP replaces the Income and Expenditure Account (which was similar to, but not quite the same as, the Profit and Loss Account)
– Fund Accounting: Restricted, Unrestricted, Designated, Endowment.

What could a package do for you?

ON THE PLUS SIDE
Improve reporting, and therefore financial management
The complexities of providing appropriate financial information to funders with the ‘contract culture’, mixed and multi-funded projects and so on have already pushed up the demands in reporting. Then add increasing pressure from new charity regulations and greater public exposure of ‘poor management’ at the same time as needing to get every last penny work to meet the demands on your organisation! A good accounts package implemented properly can make a massive difference.

Banish arithmetical errors

It is virtually impossible with most packages for them to get ‘out of balance’. (However, processing transactions during a thunderstorm has managed this in my experience!) Reports should always add up, too.

Make record keeping more consistent
You can still enter a transaction against the wrong code, but a good package will reduce the possibilities and ensure that there is a reference and amount for every cheque or receipt. This does not eliminate all manual records, though. All vouchers will still need to filed, in a logical order, and details of what was entered to the package (and preferably by who if there are many operators) should be written on them too. This will help in tracking errors, in the audit and if disaster strikes, requiring re-entry of transactions.

Reduce audit fees
The above items should mean audit work is reduced, although how easy it is to extract detailed information from the package at the year-end will also make a difference (in either direction). And any hidden problems (see below) will count against this.

ON THE DOWN SIDE
Add another layer of mystification/hurdle to get over
Aren’t finance matters bad enough without having to learn how to use a computer too? With packages like QuickBooks aiming clearly at the non-accountant, the problem is much reduced. However, it still helps that you have some idea about how your finances work, and what end-result you are expecting to get out of the system. If this applies to you, crack financial confidence first.

Hide problems
Computerisation by itself won’t solve all accounting problems. If the person doing the books doesn’t understand what cheques have been written for, or how to do a bank reconciliation, this won’t help. The spurious authority of computer generated reports makes people more reluctant to challenge figures or ask what may seem a silly question. It is easy to produce SOME figures with an accounts package, but are they up-to-date, understandable, complete and based on reality?

Use scarce resources
See issues on cost. Buying, installing and setting up systems are obvious costs, but what about continuing support? Does this mean you have to pay for upgrades to keep up-to-date? Will you need expensive consultants if you change your organisation structure, to make the accounts fit?

Lock you into an unsuitable system
This is the one which should terrify you if you have started computerisation without adequate preparation. A badly set up system is worse than useless. It can make data entry complex, slow and inconsistent; reports misleading (without all the relevant data) and late; and mask the underlying problems, making them difficult to spot, clarify and correct. Huge sums of money can be lost, due to knock-on management inefficiency and in resolving the issue.

Make you dependent on software and hardware
Regular back-ups are essential, in case of computer failure, fire, theft, thunderstorm (see above) and sheer human stupidity. Make sure the package you select is easy to back-up, and institute a clear procedure immediately.
Once you’ve computerised, it is very difficult to go back to manual records if disaster strikes. You need to be able to get your accounts system reconstituted as soon as possible – do you have another machine you can use, or are you reliant on the insurers coughing up eventually?

How does the voluntary sector differ?

REPORTING AND ANALYSIS

Tracking Restricted Funds and reporting in SOFA rather than Profit and Loss format are key needs for registered charities, while project or grant management and measures of success not reducible to a ‘bottom line’ are common complexities. Concentrating on Cost of Sales and Gross Profit before Overheads in reporting structures, typical in accounts software, is not a helpful approach. What flexibility is there in report formats, and/or what facilities to produce reports to charity requirements?
To be able to report on Funds, projects etc.. it is necessary to have been able to have analysed the transactions to this level of detail, preferably as you enter them. Are there facilities to do this, outside of the basic account codes, or do you have to have a very long chart of accounts, which is difficult to manage and familiarise?
Can the package meet the SORP requirements, and can reports during the year reflect the principles where appropriate? This requires good analysis facilities to feed into the report ‘extraction’ routine. Or in practice, do you produce monthly management accounts in a way which makes sense to your budget managers and only want to produce to SORP format at the year-end, in which case getting the precise layout is less important.

COMPATIBILITY

Import facilities: There are a number of packages around dealing with specialist income areas: covenants, membership, relationship fundraising, rent accounting, investments. Transferring data directly to the accounts prevents errors in re-keying as well as saving time. However, you may not want a ‘live’ link, as it is good practice to do checks on data brought in to the accounts package from elsewhere (e.g. membership income by batch controls).
Export facilities: This is closely linked to reporting. If a package has enough analysis available, but not the reports, a spreadsheet (or possibly database) can solve this as long as the data can be transferred to it easily. This can also be useful in building cash-flow projections and ‘what-ifs’ around changing budgets or establishing new projects.

SALES

Credit control and sales invoicing are generally much less important. Some packages have limited options – will grant income have to be entered as a paid Sales Invoice, or as an ‘exceptional item’ through a journal?

VAT

VAT is not relevant to the majority, but is often a compulsory feature – work-round required (suggestions: ignore this data item; if not allowed to, treat everything as zero rated or exempt).
Where VAT is relevant, organisations often have to deal with ‘partial exemption’, where only some VAT on expenditure can be reclaimed. This means that VAT on central costs can only be claimed in proportion to VATable activities. Generally, an adjustment outside the accounts package will have to be made before the VAT return is completed.

COST

Commercial companies have finance as a central concern, so accounts software can easily be seen as an investment. For the charity trying to squeeze every drop of benefit from its income, this is harder. Also, resources to buy new, higher specification, computers are becoming scarcer for many smaller groups. There are less likely to be in-house computer or finance experts, increasing costs where the package requires a lot of setting up.

Trends

Utilities such as wizards incorporated with spreadsheets and databases make it tempting and quite easy for small organisations to do all their accounting and reporting within these, without the cost of an accounts system. The downside comes when dealing with growth and changes of personnel – such an approach may be unable to cope or impossible to understand, with resulting disruption and costs of starting again from scratch. Usable package start at £99, making this problem avoidable, although unexpected growth may still require upgrading software (and probably hardware if you need to get into the high-end client/server arena).

Crystal Reports, a powerful but fairly inexpensive (from approx. £100) report designer, provides extended capabilities for many packages. It can link data from a variety of databases and bring it onto one sheet, but does require a knowledge of the source data structure and is likely to be overwhelming to the novice.

Developments in Job costing/project management add-ons could help in project accounting, but can be complex to set up and use, and so tend not to be suitable for use by project workers looking to manage their own costs.

Looking ahead

With continuing efforts to topple Sage from its dominant market position, and the gradual exploitation of connectivity and 32-bit benefits of Windows, analysis and reporting should continue to improve gradually for the cheaper packages. Data ‘warehousing’ and web technology are also likely to have an impact. For larger organisations, centralisation of information into database ‘warehouses’ with access via web intranets is already starting to happen.

Sage reckons it will take up to10 years for small businesses to move to ‘online’ processing and filing of data – with the accounts package no longer sitting on your machine, but accessed via a (customised) web browser. Other suppliers have already demonstrated practical use of XML web-based protocols to do electronic processing of orders, invoicing and payments, which could quickly replace EDI (Electronic Data Interchange) whose cost and complexity has limited it to the big boys. Getting this to work initially could make those 5 page Y2K questionnaires previously required by large institutions, before you invoice for a single publication, seem trivial.

Put the two (warehousing and web) together, and perhaps we are looking at outsourcing large parts of the finance function for the smaller voluntary organisation as the way forward. Another possibility is a revolution in inter-action with branches or supporters, with summary monthly accounts potentially easily accessed.



Striking the balance

There is a dilemma of balancing cost, ease of use, underlying strength of software company and product, and facilities written specifically for the sector. The latter don’t come cheap, although Kubernesis provides real value for money if you are happy with its lack of pretty screens, and they and Blackbaud can give good phone support on charity accounting problems. How important is SoFA reporting, if you only use this format at the year-end? Or do you really need to track balances on Funds during the year?

The newer written-for-Windows packages, such as Access, provide impressive facilities for the money and have used the operating environment to good effect. If you understand what you are trying to get out and hence can put together an effective chart of accounts and analysis structure, they will serve well. On the other hand, the security of a product from world accounts software leader Sage may be a deciding factor, and any problems in using the fundraising or member management modules are unlikely to hit the core accounting activity.

Selecting Accountancy Software

A REALISTIC APPROACH TO SOFTWARE SELECTION FOR THE SMALLER ORGANISATION

Some updating from original 1996 version.

Basics Allow yourself enough time for the process. Read this document through, and come up with a draft timetable. Then add time for slippage (sickness, holidays, staff changes etc.), and some more for luck!

1 What are you trying to achieve?
1.1 Look at our criteria (on Checklist), and decide how relevant they are. Look at reporting and analysis in particular.

1.2 Think about SORP issues if you are a registered charity. How do you want to handle the more tricky areas – will you leave it all to the auditor at the year-end? If not, here are some items to chew on:
i) Allocation of (eg) bank interest across Funds – is this significant, and do you want to do it within the accounts, or export it to a spreadsheet first?
ii) Is the SOFA of importance? Will you (or your auditor) be making so many year-end adjustments (eg via an ETB) that the SOFA produced by the accounts package won’t help?

1.3 What are the problems with your current accounts system (manual or computerised)? Make sure you address these in the approach, but don’t solely concentrate on them. You need a rounded view of where you are going as well as where you are coming from.

1.4 Compile your list of needs, and be clear what is essential, and what can be worked round.

2 How much can you afford?
2.1 Be realistic, but do view it as a relatively long-term investment, which can pay back repeatedly in years to come, by being able to use your finances better. Include future maintenance costs in the assessment.

2.2 Don’t forget to look at initial and future training. Perhaps you can use an existing training budget here.

2.3 Check that the proposed software will run on your hardware adequately. This includes when importing or exporting data, which tends to require more memory. If you have to upgrade, cost this, and add in extra to allow room for growth and increasing expectations.

3 A standard, voluntary sector or bespoke package?
3.1 Software written specifically for the voluntary sector may meet your needs most effectively. But be aware of the smaller knowledge base and that the supplier is nearly always very small (and you may be reliant on their survival), as well as cost.

3.2 Bespoke software, written for your organisation, may appear to offer advantages. However, it is likely to be costly initially, be dangerous if the author is not totally professional, and make you even more reliant on individuals. It is rare that documentation (if there is any!) is adequate for future users.

4 What packages meet the requirements?
4.1 If there aren’t any, reconsider the above!

4.2 Make sure you do a good search. Ask other similar organisations what they use, ask co-ordinating bodies, find a current computer magazine survey, re-visit the VolResource web site for updates..

5 Check them out
5.1 Arrange to see the packages in action, in a realistic setting (eg another voluntary organisation) if at all possible.

5.2 Think of difficult questions. Sales people will tend to reel off a list of features, and glibly say that they will meet your needs. Get them to tell, preferably show, you HOW they will actually do that, and have some examples to run through. Reporting and coding/analysis are the obvious tricky ones. If they can’t do it themselves, as they aren’t technical enough, get them to come back with the solution later.

6 Decide best fit
6.1 What fits your wish list best? Be prepared to compromise, but be clear what those compromises are, and why (and how you are going to cope with any rsulting complications).

7 Work out practicalities
7.1 Can you negotiate a charity discount? Be given extra time to pay? Will you in fact have the cash in the bank to pay the bill when needed?

7.2 Timing is vital (again). The obvious target is beginning of a new financial year, to start using the package in earnest (‘go live’). However, this may be a bad idea – will you be able to cope with all the year-end sorting out at the same time? It also means that there is no fall-back if something goes wrong with your timetable, unless you completely re-think. The only real rule is go live at the beginning of a month, or perhaps a quarter if that is an important time period.

7.3 Parallel runs are strongly recommended, where you run both the new computerised system, and the old one (manual or whatever) at the same time, and compare results after a month or two. In practice, this level of sophistication rarely happens, but you do need to do some sort of dummy run, and get proof that your systems will work.

7.4 Who will install the package on to the machine(s). If you have a network, who will be responsible for this aspect? The package supplier may not know enough about networks, and your network consultant may have no idea how an accounts package needs to be set up. Get them to talk to each other (easier said than done)!

7.5 Who will set up the accounts structure? Who will enter initial data? Do you need the auditor’s involvement to ensure the structure will meet their needs, and the opening data is correct? Design/adapt your paper systems to make data entry and referencing easy.

Scrutiny of Charity Accounts for the Smaller Charity

About this page

This article was originally published as part of the Management of Voluntary Organisations package produced by Croner Publications Ltd, (in 1999) and copyright resides with them. It was written by Dr Gareth Morgan, a partner with The Kubernesis Partnership, York. He works with a wide range of small/medium charities, both as an independent examiner and as a consultant on accounting and funding issues. Here he discusses and compares independent examination and audit.

Please note that this pre-dates various revisions to the charity SORP – see further resources links at the end.


 

Most charities now have a reasonable awareness of the new charity accounting regulations and the SORP, but are much more hazy when it comes to arranging for audit or other scrutiny of the charity’s accounts. For many trustees it is regarded as an unexciting subject and the only issue is finding someone to do it.

This is quite worrying, because the Charities Act 1993 introduced major new requirements in this area – requirements which many trustees, and even some professional accountants, have yet to address. The result is that some charities are having their accounts returned by the Charity Commission for proper independent examination or audit. Similar requirements were also introduced in Scotland, a year earlier.

The Past

Charitable companies have long been subject to audit rules under the Companies Acts, but until the Charities Act 1993 and the new regulations in Scotland, other charities were largely free to make their own choices about audit.

Previously, larger charities generally opted for a full professional audit, but many smaller charities chose an “informal audit” whereby someone with modest accounting knowledge was asked to look over the books, and sign his or her name at the end of the accounts. These informal audits were often very haphazard, with no indication at all of what the “honorary auditor” had actually done. Even with accounts prepared by professional accountants, the accountants’ report often said only “these accounts have been prepared from the books and vouchers presented to us” with no opinion as to their completeness or accuracy.

The New Rules

To address this confusion, the new rules brought in two options: smaller charities can opt for an independent examination; above a certain level a full audit is required. Independent examination allows smaller to medium charities to have their accounts scrutinised by a process that is less than a full professional audit, but which is nevertheless sufficiently thorough that charity trustees and supporters can have some confidence in the outcome.

Independent examination is an option for unincorporated charities with income in the following ranges. Note that these thresholds apply provided there is no other requirement for audit (for example, no requirement in the governing document or a condition of a funder for a full audit to take place). Also the largest income or expenditure for any of the last three years determines the minimum requirement.

* Note: see updated table at bottom of page

Minimum permitted scrutiny of accounts England and Wales: Income / expediture level Scotland: Income / expenditure level
Approval of accounts by trustees only £0-£10,000 Not applicable
Independent examination £10,000-£250,000 £0-£100,000
Full audit £250,000 or over £100,000 or over

Independent Examination versus Audit

Although independent examination represents a lesser form of scrutiny than a full audit, it is still much more demanding than the “informal audit” which many small charities had in the past.

The two main differences between independent examination and audit relate to (a) who can act and (b) the nature of the report. However, in both cases the framework is laid down by law, and there are many issues that must be considered in a charity audit or independent examination which would not be required in a commercial audit: for example, checking for proper use of restricted funds. As well as following the regulations, in England and Wales, an independent examiner must comply with the Directions of the Charity Commission. It follows that both auditors and independent examiners must have specific charity knowledge.

If an audit is required, the charity’s trustees must appoint a registered auditor (it is not sufficient just to use a qualified accountant). However, an independent examiner is defined as an independent person who is reasonably believed by the charity trustees to have the requisite knowledge and practical experience to carry out a competent examination of the accounts. No specific qualification is required, but clearly the person must have a good understanding of accounts and charity accounts in particular. The issue of independence is also very important: some “informal audits” in the past have been carried out by funders, landlords, or close relatives of trustees, where there is clearly insufficient independence.

As regards the report attached to the accounts, an audit report under the Charities Act 1993 will (if unqualified) confirm that the accounts give a “true and fair view” (or are “properly presented” in the case of small charities doing receipts and payments accounts).

By contrast an independent examiner’s report provides a “negative assurance”. The independent examiner declares that no evidence was found of lack of accounting records, of accounts failing to comply with the records, of accounts failing to comply with the Act, nor of other matters that need to be disclosed. However, such a declaration can only be made after following 12 stages of Charity Commission directions, so for most smaller charities, an independent examination provides a very effective scrutiny, which goes much further than the “informal audits” of the past, but which can be carried out without needing a registered auditor.



Choosing an Independent Examiner

Finding a registered auditor with charity experience is usually just a matter of approaching some suitable firms of accountants, but finding an independent examiner can be harder. Some accountancy firms offer independent examinations at slightly less cost than an audit, but there are also many other independent examiners: professionals in other fields with a good knowledge of charity finance; retired accountants; bankers; management accountants; staff of community accountancy projects and so on.

However, in each of these categories there can be certain concerns about the issues of “requisite ability” and “practical experience”. Even amongst accountants, only a few firms specialise in charities, and others can easily be caught out by all the new requirements. Where people are acting informally as independent examiners there is wide ignorance of the new regime: for example some “informal auditors” are doing just as they did in the past but simply putting “independent examiner” after their name with no reference at all to the requirements of the Act.

To help address these issues, a new Association of Charity Independent Examiners has been formed (ACIE). Founded in January 1999, ACIE aims to bring together all those who act as independent examiners of charity accounts, by providing a range of support, newsletters, training, and professional updating, as well as helping charities in the selection of examiners. ACIE is governed by a Council that brings together professional accountants and lay examiners from across the UK, and within the first six months the membership of the Association has grown to more than 180. The principles of an Association to support examiners have been warmly welcomed by the Charity Commission and various voluntary sector umbrella bodies.

The Association was founded on the basis that anyone interested in the subject can join as an associate member, but a full membership scheme has just been launched, which will allow those with appropriate experience to be awarded the qualification MACIE. In due course it seems likely that charity trustees will look for this in choosing an examiner.

Reproduced with permission from Croner’s Voluntary Organisations’ Briefing, part of the Management of Voluntary Organisations package. This is available on 10 days no obligation trial. For more details contact Croner Publications Ltd on 020 8247 1176 or see the Publishers page.

Further Information

Updated income thresholds table

With thanks to Graham Taylor Charity Finance and Management

Charity accounts regulations – gross income thresholds

Accounts regulations England & Wales
(Charity Commission
)
For financial years ending on or after 1 April 2009
Scotland
(Office of the Scottish Charity Regulator – OSCR)
For financial years starting on or after 1 April 2008
Audit – irrespective of gross assets (including a group if its combined gross income exceeds the threshold) £500,001 or more £500,000 or more
Audit – when gross assets exceed certain thresholds £250,001 or more
(when gross assets are in excess of £3.26m)
Applicable to all
(when gross assets are in excess of £2.8m)
Independent Examination (by a person holding an appropriate professional qualification) £250,001 to £500,000 £100,000 to £499,999
Independent Examination (by an appropriate person) £25,001 to £250,000 Up to £99,999  (but must be professionally qualified for accruals accounts)
No independent scrutiny Up to £25,000 Not applicable
Receipts and payments accounts are allowed
(non-company charities only)
Up to £250,000 Up to £99,999 (£249,999 from 1 April 2011)
Accruals accounts are required (company charities) Applicable to all Applicable to all

Note: When gross income is less than the above thresholds there may still be a need for audit or/and accruals accounts because a charity’s constitution, trustees or funders requires it.