Good Practice Guides

Our Good Practice Guides aim to give you necessary background and introductory guidance across a range of accounting and related finance topics. They are free to download but we would ask you consider making a donation to help support our work.

If you think there is an important topic or subject area that isn’t currently covered by a guide, please do let us know. We also welcome any comments, corrections or other feedback you may have.

Please bear in mind that whilst content is accurate at the time of publication, information will change over time. Guidance is of a general nature and should not be taken as, or relied upon as, recommendation for action.

Accounting Basics

Dealing with cash


This guide is designed to set out a few basic rules and procedures for handling cash within your organisation. Keeping track of cash in an organisation can be difficult. By setting up some procedures and being clear about who is responsible for cash, this task can be made simpler.

Here are some key principles to remember when you are dealing with cash:

1. All cash income such as donations must be kept separate from the cash you use to buy things.
2. Try to keep the use of cash to a minimum. Where possible make payments by cheque.
3. Keep your cash in a lockable tin in a safe place. You should keep one tin for cash income and one for cash purchases.
4. Name two people as being responsible for the cash in the organisation. These will be the only people who have keys for the tins.
5. To keep track of cash purchases operate a ‘Petty Cash System’.
6. Keep a petty cash book up to date.

Download here

Grants and contracts

When is a grant not a grant? That’s right, when it’s a contract. Or is it a Service Level Agreement?

Whatever it is, it is important for us as governing bodies of organisations to understand the nature of our income as it can have an effect on our reserves and our potential liabilities.

Grant? Contract? SLA? – It is important to be clear about the nature of your income given differing impacts on reserves and potential liabilities. Using a couple of scenarios, this short guide highlights the key differences and implications.

Download here

How to do a bank reconciliation

A bank reconciliation is the process that you go through to ensure that the bank statement and the cashbook agree. This is important to ensure that the organisation’s records are both complete and accurate.

At a particular date the balance on the bank statement may be different to that of your cashbook due to:

  • Unpresented cheques – cheques that your organisation has written, and which are included in the cashbook but which the person receiving the cheque has not yet paid into the bank, or which the bank has not yet cleared.
  • Receipts not credited – money you have paid into your bank but which does not yet appear on your bank statement, because it has not been cleared through the banking system at the statement date.

These are valid differences that are called ‘reconciling items’ as they reconcile the cashbook and bank statement balances.

Bank reconciliation is an important control in managing your finances; this guide explains what they are, and gives you a practical walkthrough on how to do a reconciliation.

Download here

Bookkeeping

This good practice guide is aimed at smaller voluntary sector organisations, who use a book rather than a computerised accounts package for recording transactions. There is a separate WYCAS Guide on how to deal with petty cash. If you receive funding for a specific purpose (known as restricted funds), you may also need to consult our Guide on Accounting for Restricted Funds

What information should the books provide?

  • A complete record of all the financial transactions of the organisation
  • When transactions have taken place
  • A reference code for finding the backup documentation
  • Analysis of incoming and outgoing money
  • Who money has been paid to
  • From whom money has been received
  • Totals for a period

This guide is aimed at organisations using manual books rather than a computerised accounts package. Example bookkeeping sheets and authorisation forms are included in the guide.

Download here

Reserves

The Charity Commission’s definition is that reserves are unrestricted income that is not yet spent, committed or designated; lets unpack that! It means that reserves exclude restricted funds (which are income funds that have been given for a specific purpose), designated funds that the trustees have set aside for a specific purpose, and any fixed assets that are being held for the charity’s own use.

This guide summarises what reserves are, why they are important and it gives some pointers for helping to develop a reserves policy.

Download here

Restricted fund accounting

The key point about fund accounting is that funds given for a specific purpose must be used only for that purpose, so the accounting records and the annual accounts must distinguish between the different types of funds according to the terms under which they were given (note that the term funds is used throughout to refer not only to money but to property and assets of any sort given to an organisation).

This guide explains the differences between restricted and unrestricted funds and gives practical guidance on how to account for different types of funds.

Download here

Accounting software & record-keeping

Introduction to spreadsheets for finance

A spreadsheet is a number of columns and rows, making a grid. Each oblong in the grid is called a cell. You can enter information into these cells for different purposes. One of the main uses for Voluntary Groups is to use a spreadsheet for bookkeeping. The Columns would include receipts and payments headings and the Rows would show each transaction entered under those headings. For more information on headings see our Good Practice Guide No.4 – Bookkeeping.

Aimed at real beginners, this guide introduces you to using a spreadsheet for recording your finances; it covers what is a spreadsheet, the benefits of using a spreadsheet and the basic functions you are likely to need.

Download here

QuickBooks a starter guide

This guide will be of use for anybody just starting to use the QuickBooks package; WYCAS also offer individual support and training. The guide is based on Version 8, but the capabilities and functions of each version are very similar. (QuickBooks Pro enables reports to be exported to Excel). You can also purchase networked and payroll facilities at extra cost.

QuickBooks is a very flexible, user-friendly system, which should save you time and trouble; it will warn you about possible errors and prevent you from performing certain mistakes (e.g. when amounts on a cheque don’t match). Transactions are easy to alter and reports/invoices can be customised or adapted to suit the user.
There is no limit to the number of companies that you can set up. However, you normally will require only one company for your organisation, although it is useful to set up a trial company to practice – you need to ensure that it is clearly identified as such.

It is usually best to start on the first date of your financial year. Don’t worry about inputting transactions or opening balances immediately, these can always be entered retrospectively.
The impetus for moving your accounting to a computerised package is often due to the difficulties of satisfying funders reporting requirements on a manual system. Quick Books allows separation of funds, these are identified as classes. The system allows for flexibility of reporting dates, and funds can be shown separately or combined.

Just a word of warning, if your manual systems are in a mess then converting to a computerised package is not going to solve your problems – and it can make them worse. It takes time to familiarise yourself with the package and it doesn’t look anything like your old ledger! It is best if you have a clear idea of your budget headings and funders requirements.

This guide will help you get started with the QuickBooks accounting package. It covers setting up organisational details, banking and basic reports.

Download here

QuickBooks basic procedures

This guide takes you through regular bookkeeping jobs including entering account transactions, reconciliations and creating budgets and finance reports.

Looking for working with lists in QuickBooks?

  1.  Choose lists from the top toolbar
  2.  Select the list you want
  3. At the bottom left corner of the List window there will be a button that is the name of the list (i.e. Account in the Chart of Accounts, Class in the Class list etc)
  4. Clicking this button will give you the option to add a New item, Edit, Delete or make Inactive
  5. Right clicking with the mouse in the List window will also give you all of these options except Delete

Download here

QuickBooks basic procedures 2

This guide covers items and invoicing, receiving payments and reports and statements.

Looking for working with lists in QuickBooks?

  1. Choose Lists from the top toolbar
  2. Select Item list
  3. Click the Item button at the bottom left of the Item list window, then New
  4. Use the tab key to navigate between the fields
  5. Type  – Select a Type for the item (usually a Service)

Download here

QuickBooks procedure timetable

This guide includes a checklist and tips with recommended timescales for routine tasks when using QuickBooks.

Download here

QuickBooks Online

An introductory guide to QuickBooks Online

Download here

SAGE Line 50

Practical introductory guidance for getting to grips with Sage 50; the guide covers getting started, setting up an organisation, handling banking and petty cash and reports.

Download here

SAGE Line 50 Advanced

This guide gives detailed guidance on using the customers, invoicing, suppliers and budgets modules.

Download here

Cloud computing and accounting

This guide is aimed at those who are thinking of moving their accounting from a software package to doing it on-line. It covers what the cloud is, the pros and cons of using it and issues to consider in making a decision. It includes a summary of available options.

Download here

How to be safe when using the internet or cloud

This guide is designed to be read in conjunction with the ‘Cloud accounting and Accountancy’ guide. If focuses on the security of your data and gives some simple practical advice on how to choose your passwords and it also covers the importance of backing up your data.

Download here

Planning and costing

Introduction to full cost recovery

This is a step by step practical guide to applying the principles of full cost recovery in your organisation.

Download here

Budgeting

This guide covers why a budget is needed and when it should be prepared. It takes you through – step by step – how to prepare a budget. Don’t forget to download the separate appendices to this guide

Download here

Budgeting Appendices

This document contains the appendices to the budgeting Good Practice Guide which covers why a budget is needed and when it should be prepared. The guide takes you through – step by step – how to prepare a budget.

Download here

Financial process and practice

Financial procedures

This guide includes a template financial procedures document with notes and guidance for completion.

Download here

Money Management booklet – Part 1 Introduction and budgeting

* Please note due to the size of the full document it is split into four separate downloads – if you would like a hard copy of the full document please contact us *

Download here

Money Management booklet – Part 2 Bookkeeping

* Please note due to the size of the full document it is split into four separate downloads – if you would like a hard copy of the full document please contact us *

Download here

Money Management booklet – Part 3 Financial rules

* Please note due to the size of the full document it is split into four separate downloads – if you would like a hard copy of the full document please contact us *

Download here

Money Management booklet – Part 4 Annual & management accounts

* Please note due to the size of the full document it is split into four separate downloads – if you would like a hard copy of the full document please contact us *

Download here

Getting ready to have your annual accounts checked

This guide explains the differences between an audit and independent examination, how to go about having your accounts scrutinised and the practicalities of getting this done.

Download here

Expenses

A guide to paying expenses to employees, volunteers and your management committee. Please remember to also download the separate appendices to this guide!

Download here

Expenses Policy - Appendices

These appendices are sample documents and should be read in conjunction with the Expenses Good Practice Guide.

Download here

Governance

Beccoming a charity

This guide summarises the accounting requirements for small charitable companies.

Download here

Charity registration

This guide outlines the cases when an organisation needs to register as a charity and summarises the benefits of registering for charitable status.

Download here

Insurance

This guide summarises the different types of insurance that are likely to be relevant for community and voluntary sector organisations. It also gives some tips on things to think about when taking out insurance.

Download here

Financial difficulties and insolvency

A guide on how to spot and deal with financial difficulties and how to prepare and deal with insolvency.

Download here

The role of the Treasurer

This guide covers the roles and responsibility of the treasurer and how these may differ depending on the size of an organisation. It also gives some tips on how to recruit a treasurer and the skills necessary for the role.

Download here

Presenting financial and other management information effectively

This guide gives some suggestions to help your financial and other management reporting. It covers considering your audience, why presentation is important and offers ideas for visually displaying information including summarising how to use a range of common types of charts and graphs.

Download here

Using charts in Microsoft Excel

This guide gives a basic introduction to charting for users of recent versions of Microsoft Excel. It uses illustrations to give a simple step by step approach for creating and editing charts and will help you to present your financial (and/or activity) information visually.

Download here

Closing down a solvent organisation

Is your organisation chosing to close down? If you can pay your bills (are solvent) this is some guidance through the process of closing – with consideration of requirements for charities and companies.

Download here

Tax

Gift Aid and GASDS

This guide explains what gift aid is and the conditions for making a claim. It also covers the Gift Aid Small Donation scheme (GASDS) introduced from April 2013 and HMRC’s Charities Online system for making claims.

Download here

Gift Aid and GASDS Appendix 1

To be downloaded in conjunction with Gift Aid & GASDS Good Practice Guide.

Download here

Gift Aid and GASDS Appendix 2

To be downloaded in conjunction with Gift Aid and GASDS Good Practice Guide. **Please note – you need to change print to landscape before printing.**

Download here

Gift Aid and GASDS Appendix 3

To be downloaded in conjunction with Gift Aid and GASDS Good Practice Guide.

Download here

VAT

An introductory guide to VAT for small charities and voluntary bodies, it covers VAT categories, reliefs available and recovery of VAT.

Download here

Please bear in mind that whilst content is accurate at the time of publication, information will change over time. Guidance is of a general nature and should not be taken as, or relied upon as, recommendation for action.

Powered by WordPress. Designed by Electroville

Stringer House, 34 Lupton Street, Hunslet, Leeds, LS10 2QW | Charity Number 1076962 | Company number 3721361