Why charities require specialist accountancy advice

In the UK, it’s estimated that there are 488,000 not-for-profit organisations, around 80% of which are charities. These charities received £12.7 billion in donations in 2022, according to the Charities Aid Foundation, which is a substantial amount of money to manage and put to good use.

It’s vital charitable and not-for-profit organisations undertake specialist financial advice to not only optimise the value of donations and gifts and build trust with their donors, but remain compliant with the relevant governing bodies including Companies House, HMRC and The Charities Commission.

At WoodWhite Accountants we have a specialist team that provides charity and not-for-profit accountancy services, led by our Director of Client Services, Keith Westran.

In this blog, we discuss the key reasons why charities require specialist accountancy advice and guidance in order to thrive and make a lasting impact.

Compared to commercial companies, the accounting requirements for charities are different.

They can be vast and complex especially when it comes to tax. They require specialist knowledge to ensure compliance with regulatory bodies and reporting requirements. A specialist accountant with expertise in not-for-profit accounting, like WoodWhite, can help ensure that a charitable organisation maintains a reputable and positive relationship with regulatory bodies as well as donors.

Charities often operate on limited resources, making effective allocation crucial.

Every penny donated must work hard for the cause, which is why strategic financial planning is so important. Specialist accountancy advice helps to ensure all donations contribute efficiently to the charitable objectives. This specialist advice can assist with creating budgets and identifying areas where funds can be optimised for maximum impact.

Transparency is paramount in the charitable sector.

Donors want to ensure their contributions are making a real difference. Even though charitable donations are not yet back to pre-pandemic levels, they have increased consistently year-on-year since 2020, and that trend will continue if donors can evidence that their donation is used in the right way, fulfilling charitable objectives. This is where the role of a specialist accountant plays a pivotal part. Our charity service team helps charities maintain accurate and transparent financial records, providing a clear picture of how funds are used. These reports can provide assurance to current donors as well as help to attract potential supporters who value accountability.

Another area of specialist advice we offer charities and not-for-profits is in navigating grant applications.

Charities often rely on grants and donations to fund their projects. Managing these funds requires meticulous attention to detail, and adhering to specific grant requirements that may be in place. Our specialist charity service team assists with the preparation of comprehensive reports that satisfy the expectations of grant providers and help manage the funds effectively.

Charities and not-for-profits must adapt to specific changes in regulations, accounting standards, and economic conditions that impact their sector.

Accountants that focus solely on commercial companies may not be in tune with such changes which could result in the organisation falling foul of regulatory requirements. We have a dedicated team for the charity sector for this purpose, so we stay informed of such developments, providing our charity clients with the knowledge and strategies they need to navigate the evolving financial environment. We can also help them to identify and mitigate potential financial risks that could impact the sustainability of the charity such as unexpected expenses and forecasting economic downturns.

Our charity and not-for-profit services are led by Keith Westran who has over 24 years advising a diverse portfolio of national and international clients making him experienced in dealing with these diverse organisations.

Our services centre around compliance to relieve charities of the stress and pressure associated with regulatory requirements.

Our proactive team takes ownership of your regulatory and compliance needs so you can have more time to concentrate on other key areas of the day-to-day running of your charitable activities.

We outline our charity and not-for-profit services here. For a free no obligation consultation, tax review and services quote, contact us on 0118 997 7100 or email enquiries@woodwhiteaccountants.co.uk