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Get to Grips With Book Keeping: Book-keeping for clubs, societies and charities

by Andy Lymer and Nick Rowbottom

In smaller ‘not-for-profit’ organizations, the basic objective will be to provide a record of the money that has been received and account for the way in which it has been spent – often nothing more than this is required so the accounting principles that are used can be fairly simple. In terms of book keeping, most transactions will be recorded in the Cash Book (and perhaps the Petty Cash Book) with the required information being provided by the use of analysis columns. This information can then be used to produce a Receipts and Payments Account or an Income and Expenditure Account.

A Receipts and Payments Account is used if the organization is so small that it has no assets other than cash and no liabilities. It therefore does not bother with the adjustments for debtors, creditors, accrued expenses or prepayments. The Receipts and Payments Accounts, as a summary of the Cash Books, will provide all the necessary information.

An Income and Expenditure Account is used if the organization has assets and liabilities. It is also based on an analysis and summary of the Cash Books but adjustments are made for debtors, creditors and other items, in particular subscriptions and capital items, to ensure that everything relating to the current accounting period is included, regardless of whether payments have been transferred in that time period. A balance sheet, or statement of affairs, will also be prepared.



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