Accounting Basics 2: Investing in finance staff

Putting resources into a good quality finance team helps make a charity more efficient, says senior accountant Jonathan Lachmann

Jonathan Lachmann
Jonathan Lachmann

No one who sets up a charity does it thinking "above all, it must have a first rate finance department".

For an organisation that is focused on making the world a better place, bookkeeping can seem a very secondary activity. But for any charity, keeping tabs on its finances is vital if it is to run efficiently.

Investing in a good quality finance team is an investment in the efficiency of the charity – and its ability to make a difference.

Charities are understandably always keen to keep their administrative costs down, and this impulse is even stronger when it is proving difficult to secure funding. But the sad fact is that poorly trained and supported staff generally produce poor work.

Mistakes made by finance staff can prove very costly, in terms of both finance and inconvenience.

Inaccurate figures are not suitable for management reporting because they can hinder the ability to make strategic decisions about the organisation’s future. In addition, unpicking bad practice can be confusing and time consuming, and could delay the preparation of the statutory accounts.

For serious mistakes, it might be necessary to call in the services of a qualified accountant – and they're rarely cheap.

At worst, a poorly trained finance team is likely to maintain ineffective financial controls, putting the charity at a greater risk of fraud.

Investing in your finance staff will reduce these risks and reap other rewards too. The best way to do this is to ensure that the accounts team has proper training.

This will help them to understand the job at hand, work faster to a higher standard and reduce mistakes.

Providing training schemes within the charity, or in association with a partner organisation, exhibits a strong sense of social responsibility and is an investment not only in your own staff but also in the wider community.

Untrained staff can be employed cheaply at first, but by offering them the chance to gain a respected qualification such as the AAT, a charity can help them become efficient and loyal employees.

Training contracts enable the organisation to tie employees in for a period of time, ensuring the charity reaps the benefit of the investment.

A charity’s finance team is at the heart of everything it does. A small investment here is a uniquely efficient way to ensure that it does everything better – and that the charity’s income goes as far as possible.

Jonathan Lachmann is a senior manager at the accountancy firm HW Fisher & Company

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in
RSS Feed

Third Sector Insight

Sponsored webcasts, surveys and expert reports from Third Sector partners

Third Sector Logo

Get our bulletins. Read more articles. Join a growing community of Third Sector professionals

Register now