At Work: Law and Governance - Regulation with Rosie

The Charity Commission's Rosie Chapman on dealing with annual accounts.

Many trustees dread preparing accounts, but some of them hardly make it easy on themselves by opting for far more complex accounts than they need. Never mind the relative complexities of accruals accounts: the vast majority of charities on the register - about 140,000 - can prepare the simplest type of accounts of all. These are receipts and payments accounts, known as R&P accounts.

R&P accounts are summaries of what comes into and goes out of a charity's cashbook. It's as simple as annotating a bank statement, grouping together similar items (such as rent, wages, donations and grants) and drawing up a list of the charity's main assets and liabilities at the end of the year.

Non-company charities with annual incomes of up to £100,000 are allowed to file them.

R&P accounts can become slightly more complicated if a small charity has restricted funds or an endowment. But even if this is the case, the accounts are much simpler than accruals accounts - no notes or valuation of assets and no balance sheet to balance.

And the very smallest charities, some 95,000, with incomes or expenditures under £10,000, don't even need to have their accounts examined or to send us annual reports and accounts.

Small charities also need to prepare a trustees' annual report. This can be short and sweet, giving details of the charity and its trustees, its aims and its achievements in the past year.

There can be catches. Company charities can't use R&P accounts, and some donors insist their beneficiaries prepare accruals accounts and have them audited. Once in a blue moon, a charity's own governing document prohibits their use.

But trustees of charities that fit the criteria could save themselves time and effort. The R&P accounts pack (CC16) on our website is a good place to start.

- Rosie Chapman is executive director of policy and effectiveness at the commission.

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