A Simple Accounts Spreadsheet for Small Charities ...Simple Accounts Spreadsheet for Small Charities...

Supporting Small Charities & Voluntary OrganisationsRegistered Charitable Incorporated Organisation, No:1161963

A Simple Accounts Spreadsheetfor Small Charities

& Voluntary Organisations

Copyright © 2012-18 Small Charity SupportAll copyright and intellectual property rights reserved.

This spreadsheet and its associated Instruction Bookletare NOT in the public domain.

Instructions-SAfSC2-V7e

Simple Accounts Spreadsheet for Small Charities & Voluntary Organisations

A Simple Accounts Spreadsheetfor Small Charities &

Voluntary Organisations

Contents

1.Developer’s Notes........................................................................................3

2.Overview......................................................................................................8

3.Getting Started...........................................................................................11

4.Normal Daily Use of the Spreadsheet........................................................21

5.Inserting, Amending, Cancelling & Sorting Transactions............................30

6.Filtering Transactions.................................................................................34

7.Recurring Transactions..............................................................................37

8.Assets WorkSheet......................................................................................39

9.Annual Accounts.........................................................................................39

10.Dealing with Transactions Across Different Financial Years.....................40

11.End-of-Year Operations............................................................................44

Copyright © 2012-2018All rights reserved

Page 2 of 48


1. Developer’s Notes

1.1. Background and Concepts

Inspired by the iconic book “Small Is Beautiful: A Study of Economics As If People Mattered”(E.F.Schumacher), the Simple Accounts Spreadsheet was developed to meet the needs of thetrustees of small charities operating their accounts on a Receipts & Payments basis. It doesthat by breaking away from the jargon and complexity of double-entry bookkeeping which areunnecessary for the simple accounts of small charities.It might similarly be titled “Simple is Beautiful: Charity Accounts As If Trustees Mattered”.

It is compatible with the Charity Commission's guidelines for Receipts & Payments accountshttps://www.gov.uk/government/collections/receipts-and-payments-accounts-pack-cc16

and targeted at those charities which feel that the functionality of “fully fledged” commercial software packages is inappropriately sophisticated (ie: more complex and, therefore, expensive) for their needs but do not have the time or expertise to develop their own in-house bookkeeping system.

The Simple Accounts Spreadsheet is NOT a panacea for all charitable organisations. Many charities will find it unsuitable and will require something more “substantial”. But charities which are currently managing with their own “in house” spreadsheets but are feelingthe need for something just a bit more comprehensive might find some some useful ideas and solutions in the Simple Accounts Spreadsheet.

The Simple Accounts Spreadsheet is “open source” - ie: all the formulae used are visible andaccessible to the user. Users can therefore validate for themselves the methodologies used and, where they consider it appropriate, can modify the formulae to meet their own requirements.

The *.xlsx version of the current version of the Simple Accounts spreadsheet is compatible with Microsoft-Excel® from 2003 onwards. It can also be imported into LibreOfficeCalc®, part of the widely-used LibreOffice® suite of software (the successor to OpernOffice) downloadable free of charge from the internet. But its compatibility with other spreadsheet software has not been tested.

Inevitably there are some differences in the ways that different versions of “compatible” software actually operate in practice. Where appropriate (and practical) known significant differences have been illustrated in this guide.

1.2. So How Does It Work?

a) Oil & Electricity vs Coal

Forget all the usual accountancy jargon of double-entry book-keeping, nominal accounts, balance sheets, journals, trail balances, columns for “this and that” stretching as far as the eye can see. The Simple Accounts Spreadsheet does not need to use them.

There is absolutely no disputing that double-entry book-keeping was a marvellous innovationin its day which revolutionised financial management and trade. Just like steam engines (burning coal to boil water to produce steam to drive heavy machinery) were marvellous innovations in their day which revolutionised manufacturing and industry.

But when oil came along, and the ability to generate large amounts of electricity, steam engines became obsolete. Even though it was technically possible to burn oil or use electricity instead of burning coal to boil water to produce steam there was no point because there were much more efficient ways of using those sources of energy to drive machines.

Page 3 of 48


Unfortunately the same has not been true for accountancy.The advent of computers means that there are now much more efficient and effective ways of managing financial data – eg: spreadsheets and relational databases – which have made the need for double-entry bookkeeping as obsolete as steam-engines1. But the accountancyprofession has been reluctant to give up all the “professional mystique” of their double-entry procedures and jargon – like railway aficionados insisting that trains continue to be pulled by steam-engines even if the steam is now produced by burning oil or by electricity.

b) Tags vs Columns

In any financial management system it important to be able to categorise transactions (for the receipt or payment of money) to allow those transactions to be identified and aggregated by category for analysis and monitoring/management purposes.

In classical “ink on paper” double-entry book-keeping systems transactions were categorisedinto “Nominal Accounts” by recording the amount of each transaction in different columns for each category across a large book (Journal). Then, the total (aggregate) amount of money received or paid out under each category should be calculated by adding up the amounts in the column corresponding to the relevant category.

This worked extremely well and was a great improvement on having just one simple list of transactions all jumbled together.Except that it quickly becomes unwieldy – necessitating a collection of inter-related journals (ledgers) – if one wants to have either a large variety of categories of receipts/payments or the facility to allow individual transactions to be categorised in several different ways.For example: it might be desirable to be able to categorise individual transactions under several unrelated headings, both “operational” (eg: salaries, training, travel, stationery, printing, utilities) and “funding” (eg: the source of the money – donations, grants, service contracts, etc. – to which the transaction related).

Relational databases/spreadsheets allow this to be done very easily by “tagging” transactions with one (or several) tags.This is shown in “Bank” worksheet of the Example spreadsheet.

All transactions are recorded in simple date order without any necessity to separate out receipts and payments into separate “Journals” (as is often done in classical double-entry systems).

In addition to the basic information for each transaction – ie:• date (Column-A);• reference (Column-B) – eg: cheque/invoice/receipt number;• Payer/Payee (Column-E);• a comment on the reason for the transaction (Column-F);• the amount of the transaction (Column-G) – positive for receipts, negative for payments

(no need for separate journals, or even columns),;

the record also includes 3 additional columns:• the “Category” tag (Column-C)• the “Fund” tag (Column-D)• a “Reconciled” tag (Column-H) to indicate when the transaction appeared in the Bank

statement – useful for checking for cheques issued but not yet presented or invoices issued but no yet paid.

Transactions with specific characteristics can then easily be identified/separated for detailed analysis either manually by use of the spreadsheet's “Filter” function (see Section-6) or

1 Note: Modern spreadsheets (such as Microsoft-Excel®, used to create the Simple Accounts Spreadsheet) are not properly “Relational Databases” (eg: Microsoft-Access®). But they do includes many formulae which allow them to replicate effectively much of the functionality of “proper” relational databases.The Simple Accounts Spreadsheet makes extensive use of such formulae to recreate many of the features which would have been present if the Simple Accounts software had been written in Microsoft-Access.

Page 4 of 48


automatically (in another worksheet) by use of formulae (eg: =sumifs(......)) by defining which tags are to be used in the analysis:

For example:

Analysis of all expenditure on salaries can be achieved by use of a filter/formula which specifies that only payments transactions tagged as Category=Salaries be selected and aggregated;

Analysis of all income related to the “Safe at Home” project can be achieved by use of a filter/formula which specifies that only receipt transactions tagged as Fund=Safe at Home be selected and aggregated;

Analysis of expenditure on salaries for the “Safe at Home” project as a proportion of the income for that project can be selected and aggregated by use of filters/formulae which specify that both receipt transactions tagged as Fund=Safe at Home and payments transactions tagged as Category=Grants or Salaries be selected and aggregated.

Analysis of outstanding transactions (eg: cheques not presented, invoices not yet paid) can be achieved by use of filters/formulae which specify that transaction tagged as Reconciled=”Blank”, together with any other appropriate tags, be selected and aggregated.

1.3. Pros & Cons of the Simple Accounts Spreadsheet

The Simple Accounts Spreadsheet is designed for use by small organisations which manage their finances on a Receipts & Payments basis.

It does not have the functionality to handle Accruals Accounts in full compliance with the Statement of Recommended Practice (SORP).

However, some of the simpler characteristics of accruals accounting can be accommodated if necessary (eg: where an expense is incurred and reimbursed right at the end of one financial year but the claimant does not actually present the cheque to their account until the following financial year); These are dealt with in more detail in Section-1.3.e

a) Multiple Bank Accounts

It has provision for only one bank, one cash and one deposit account, initially set to accommodate 1000, 500 & 200 transactions respectively. But those limits can be extended if necessary;

b) Relational Database Technology vs. Double-Entry BookKeeping

Neither MS-Excel® nor OpenOfficeCalc® spreadsheets are fully functional relational database systems (ie: like MS-Access® or OpenOfficeBase®).

But they both have functions which are similar to those used in full relational database systems. So the Simple Accounts Spreadsheet does not need to use classical “double-entry” bookkeeping methodology. Instead it achieves the same result in a much simpler, intuitive and, therefore, easier-to-use and understand way by tagging transactions with appropriate categories to enable the transactions to be analysed in a variety of ways;

The use of tags and filters/formulae means that:

“Bookkeeping” consists of nothing more than entering “common sense” transaction data into a simple list consisting of just 5 columns (plus 3 additional columns for the tags);

Running the system therefore requires no special bookkeeping or accountancy training because it has no need of “classical” double-entry jargon and procedures;

The standard MS-Excel filtering functionality, in conjunction with the Categories and Funds tags, allows ad hoc analyses of specific issues to be undertaken quickly and easily (again without specialist expertise or compromise/degradation of the data).

As each transaction is entered, the corresponding management information (eg: Budget Report, Cash-flow Report) is updated “in real time” and is therefore always available in a

Page 5 of 48


simple-to-understand format for the Trustees (and for anyone else with a legitimate interest).This is most noticeable at financial-year-end when the charity's financial statements for the Annual Report can be produced within a week or two rather than the months that seem to be necessary for typical accountancy gymnastics to be performed;

c) Relational Database technology vs Spreadsheet technology.

The most important practical difference between relational database technology and spreadsheet technology is that the tags assigned to data are managed automatically in relational databases while in spreadsheets they are managed manually.

For example: Where a transaction has been tagged as “Membership” and it is decided that the tag should be renamed as “Subscriptions”, in a relational database all that is necessary isto change the name in the master-record of tags and the tags associated with individual data records are changed automatically. But in spreadsheets, changing the tag name in the master-record (eg: the “Categories” worksheet in the Simple Accounts Spreadsheet) does not change the tags attached to the individual transaction records. Those individual tags all have to be changed manually otherwise the formulae associated with them will no longer function correctly.

There are other less significant differences, too. Relational databases generally have betterfacilities for:

creating tags and sub-tags (eg: “Voluntary Income” as a master-tag under which there canbe sub-tags for Membership, Donations and Gift Aid (as in the example spreadsheet), allowing data to be aggregated at both the master-tag and sub-tag levels as required.

designing ad hoc reports – typically on a “query by example” basis where the user sets out the desired report layout using something more akin to a word-processor or publishersoftware and just tells the database software which tag aggregates are to be placed in which location.

Whilst it would have been possible to design the Simple Accounts Spreadsheet as a relational database instead (eg: using Microsoft-Access® instead of Microsoft-Excel®) that was not done because; (i) MS-Access is not so widely available as MS-Excel; (ii) the cost of purchasing MS-Access for those who don't have it as part of a package can be greater than the cost of purchasing commercial accounts software; (iii) even if the Simple Accounts software was distributed as “open source”, not many would have the technical skills to use and develop it for their own requirements; (iv) software written in MS-Access code is not as easily transferred to other software.

d) Multiple Designated/Restricted Funds

Because managing tags is a manual process in spreadsheets while it is an automatic process in “proper” relational databases, the Simple Accounts Spreadsheet's ability to handleefficiently frequently changing designated and/or restricted funds is somewhat limited. That's because the specific needs of individual charities vary considerably so that creating a “one size fits all” design would require a significant degree of complexity which would negate the underlying principle of “Simple is Beautiful”.

But because the Simple Accounts Spreadsheet is provided as “open source”, charities which have specific needs (and sufficient knowledge of MS-Excel) are free to adapt its concepts and core design on an ad hoc basis to meet their own specific needs..

e) Receipts & Payments vs Accruals Accounts

Under the Receipts & Payments (R&P) accounting procedures, amounts received and paid are recorded at the time that they were received/made regardless of the financial period to which they relate. But under Accruals Accounting (AA) procedures amounts received and paid have to be recorded within the financial year to which they relate, even if that means breaking the amount into two (or more) parts.

Page 6 of 48


Whilst using R&P accounting procedures makes bookkeeping somewhat simpler, it can also create distortions which make it more difficult for the Trustees to appreciate the true financial position of the charity and, therefore, to make the most appropriate financial decisions. For example: the bank account/statement might show a deceptively “healthy” balance if there are a number of substantial outstanding payments (Creditors) still to be made which have notyet been entered into the records. Conversely, the bank account/statement might show the charity's reserves as worryingly low because a significant deposit (eg: from a successful grant application) is still to be made.

For this reason, the Simple Accounts Spreadsheet has been designed to allow (ie: encourage) transactions to be recorded at the time of their origination (eg: when a payment cheque is written or an invoice for goods/services supplied by the charity is raised). But such transactions are tagged as “outstanding” until they appear in the bank statement and have been “ticked off” (ie: reconciled) as having actually been paid or received.The Bank transactions worksheet, uses the “Reconciled” tag to monitor and report “in real time” both the actual “cash in the bank” (ie: EXCLUDING outstanding receipts and payments) and the committed “cash in the bank” (ie: when all receipts due have been received and banked and all committed payments have been taken from the account).

Where receipts or payments have been delayed for some reason (eg: a grant deferred or major purchase postponed) those transactions will not appear in the Bank Report but will still appear as a variance in the Budget and Cash-Flow Reports.

This enables the Simple Accounts System to provide “the best of both worlds”, - maintaining the simplicity of Receipts & Payments accounting whilst still able to provide financial reports to the Treasurer, Trustees and financial administrators which include some useful informationon cash-flow issues beyond basic “how much have we got in the bank” information.

Such issues can be a particular problem when the delays mean that transactions occur in a different financial year to that originally anticipated in the annual budget.. More detail on dealing with such situations is provided in Section-9 Dealing with Transactions Across Different Financial Years.

But while the Simple Accounts System can handle some of the simpler elements of accruals accounting, it is NOT designed to be a fully comprehensive accruals accounting system and will generally not be suitable for organisations which are legally required to maintain their accounts on a full SORP (Statement of Recommended Practice) basis.

1.4. The Legal Stuff

The spreadsheet is Copyright © 2012-18, Small Charity Support, All rights reserved.

The spreadsheet is made available "as is" with no warranties, express or implied about its completeness or accuracy or fitness-for-purpose. Anyone using the spreadsheet must take all appropriate steps to satisfy themselves that it will be suitable for their needs.

Small Charity Support claims, to the maximum extent allowed by law, its Copyright and Intellectual Property Rights in the Simple Accounts Spreadsheet. Small charities and voluntary community groups may use and develop the Simple Accounts Spreadsheet for their own internal bookkeeping free of charge and royalties provided that the Small CharitySupport copyright notice is retained and clearly visible in ALL user-modified versions of the spreadsheet. But the Simple Accounts Spreadsheet may not be developed for, or distributed to, other organisations, neither free of charge nor by sale.It is requested that, as a courtesy, anyone intending to use the spreadsheet lets Small Charity Support know of that by e-mail to: [email protected]

1.5. End-User Support

Small Charity Support regrets that, due to resource limitations, it is unable to provide any end-user training or support in the use of this spreadsheet beyond the instructions here or in the spreadsheet itself. Therefore, any alterations to this spreadsheet to meet local

Page 7 of 48


requirements are made at the user's own risk should only be undertaken by persons with appropriate expertise in the use and manipulation of spreadsheet formulae.

However, we would be glad to hear of any suggestion you have or problems that you encounter whilst using the spreadsheet by e-mail to: [email protected] possible we will attempt to rectify such problems but there is no guarantee that wewill do so promptly, or at all.

2. OverviewThe Simple Accounts Spreadsheet consists of 10 individual worksheets:Title; Bank; Cash; Deposit; BudgetReport; CashFlow; Recurring;Categories; Funds; Annual Accounts;the purposes of which are listed below.

However, the worksheets are tightly interlinked – data in one worksheet are either derived from the data in other worksheets or are used by other worksheets.In fact, most worksheets require virtually no data input but are summaries – calculated and updated automatically “in real time”, from the data being entered into other worksheets.

FOR THAT REASON IT IS IMPORTANT TO NOTE that some common spreadsheet operations, like “Click & Drag” or “Cut & Paste”, SHOULD NEVER BE USED in the Simple Accounts Spreadsheet, except where explicitly instructed in this User-Manual that it is safe todo so. Such operations cause the formulae to become un-synchronised and, although it may not be immediately apparent, that can cause the internal calculations to cease to work or, worse, produce unobvious incorrect results.

There are two versions of the Simple Accounts spreadsheet:

BlankThis consists of a working version of the spreadsheet in which there are no data and just a skeleton structure for the Categories.This is the version that you will use to create your own working version of the spreadsheet, configured according to you needs.

Example (Better Living Charity)This consists of a working version of the spreadsheet which has been configured to meet theneeds of a real small charity and has some real data entered into it so that you can see how the spreadsheet works in practice.The data have been adapted (and anonymised) from the transactions of a real small charity which is using the spreadsheet.You will not normally use/adapt this spreadsheet to create your own to manage your charity'saccounts. Instead it is provided for you to refer to and compare the way in which you have configured the blank worksheet to meet your own particular requirements.

Throughout these notes there will be screen-shots taken from both spreadsheets to illustrate the day-to-day operations for setting up and using the spreadsheet for your own charity.

2.1. The Worksheets

a) Title

This worksheet contains basic information about the name of the organisation and its accounting period. It gets updated manually for each new accounting year and the information is used to put appropriate titles and headings on other worksheets.

Page 8 of 48


b) Bank

This worksheet is used to record the transactions with the charity's bank account.It (intentionally) has much in common with an ordinary bank statement.

c) Cash

This worksheet is for recording Petty Cash transactions.

It functions in the same way as the Bank worksheet and can be ignored, or used for a second bank account if a petty cash account is not required.

d) Deposit

This worksheet is for recording transactions to and from a deposit or other form of savings/reserve account. Although it functions in a similar way as the Bank worksheet it is not intended for use with current accounts which involve transactions to or from outside sources other than the receipt of interest payments.

e) BudgetReport

This worksheet puts together a simple management report for regular presentation to the Trustees and other interested parties. It aggregates all the transaction data by category for the selected accounting period and compares them with: (i) the budget for the selected accounting period (with calculation of the variances, too); (ii) the total budget for the current financial year; (iii) the out-turn for the previous accounting year.

Once set up for the year, the only thing to be entered (by selection from a drop-down list of options in Cell-G1) on this worksheet is the Budget Report Date – ie: the accounting period for which the report is required.

This means that, provided that the Bank & Cash transaction worksheets are up-to-date, this worksheet provides, “at the click of a button”, an up-to-date financial status report for presentation to the Trustees, and whoever else needs it, pretty much “on demand”.And it does so in a format which is similar to that used for the Financial Statements in Annual Accounts. This enables Trustees to see how the final Annual Accounts are developing at any time during the year.

f) CashFlow

This worksheet creates a high-level review of aggregated actual and anticipated (Budgeted) receipts and payments by month, together with net cash assets and presents the data in simple graphical form suitable for presentation to Trustees meetings. The entire worksheet is created automatically from data already entered elsewhere in the spreadsheet. So it is always as up-to-date as the transactions data and requires no additional input.

g) Recurring

Where a charity has a significant number of transactions which recur in essentially the same format each month, these can be set up in this worksheet where they can be simply updated as appropriate and then “cut and pasted” into the relevant transaction worksheet to reduce data entry time.

However, as some of the cells in the Recurring worksheet use formulae to speed up data entry, WHEN COPYING & PASTING RECURRING TRANSACTIONS INTO ANOTHER WORKSHEET IT IS VITAL THAT THE “PASTE VALUES” OPTION IS USED RATHER THAN SIMPLE “PASTE” otherwise the formulae themselves will be copied & pasted and cause errors in the transactions worksheets.

No other worksheet refer to the Recurring worksheet so, if not needed, it can be ignored or hidden. It can also be deleted but that is not recommended.

Page 9 of 48


h) Categories

This worksheet is the “engine room” of the Simple Accounts Spreadsheet. It is here that the user of the spreadsheet sets up: The categories (“Nominal Accounts” in accountancy jargon) under which the charity wants

to identify its financial transactions for reporting purposes; The budget for the financial year.

The structure (grouping together) of the categories already set up in the Simple Accounts Spreadsheet is intended to reflect those illustrated in “Table 2: Example of activity based receipts & payments categories”, in the Charity Commission guidance publication “CC16b: Receipts and Payments Accounts: Introductory Notes”

In the blank spreadsheet as downloaded, all the monthly budget figures are set to be a uniformly-distributed 1/12th of the total budget for the year for that category.However, columns H-S of the Categories worksheet is one of the few areas in the entire spreadsheet where it is OK for the user to over-write the pre-set formulae with manual figures or (for users with sufficient expertise) alternative formulae.This allows the user to override the pre-set monthly formulae to create “flexed” budgets in which the monthly budget figures vary in accordance with the anticipated month-to-month cash-flow for that particular category.

Once set up, this worksheet automatically calculates:

The aggregate of the transaction amounts for each category as entered into the Bank and Cash worksheets;

The cummulative budget-to-date for each category based on the Report Date set in the BudgetReport worksheet (see Section-e above).

These figures are then picked up and put into the formatted Budget Report for presentation to the Trustees and others who might need them.

As the “engine room” of the spreadsheet, this worksheet is designed to be functional rather than “aesthetic”. So, once set up at the beginning of each financial year there is normally noneed for users to access this worksheet other than if it is necessary to amend the budget figures.

i) Funds

This worksheet is used in conjunction with the Funds columns in the Bank, Cash & Deposit worksheets. It works in the same way as the Categories worksheet. The Fund names in this worksheet are used to populate the drop-down lists in the Bank & PettyCash worksheets so that individual transactions can be linked to a particular fund.

j) AnnualAccounts

This worksheet shows how the data collected can be aggregated and formatted into the information typically required for the charity's Annual Accounts in the structure recommendedby the Charity Commission.

It is primarily for information/illustration and will generally need to be tailored quite a bit to meet the specific requirements of individual charities. No other worksheets refer to the Annual Accounts worksheet so, if not needed, it can be ignored or deleted.

2.2. Range Names

Throughout the above worksheets range-names (rather than absolute cell references, eg: A3or H1265) have been extensively used where appropriate to simplify formulae and make them easier to understand & manipulate, and to make the entire spreadsheet less susceptible to errors in formulae when adding or deleting cells.

Page 10 of 48


The way that range names are used throughoutthe spreadsheet are illustrated by their use inthe Title Page. The range-names in currentuse can be seen by clicking on the drop-downarrow in the cell-identification box in the top leftcorner of the spreadsheet.

Clicking on a range-name in the drop-down listwill take you immediately to that cell or range ofcells, even if it is in a different worksheet to theone currently being used.

On this Title worksheet, cell A6 has been giventhe range-name “CharityName” and cell A11 therange-name “FYEDate” and those range namesare used in formulae to replicate the name ofthe charity and the end-date of the charity’s financial year at various other places throughout the spreadsheet.

For further information on range-names, see the glossary at the end.Note that the spreadsheet software automatically creates range-names for its own internal purposes (eg: the range of cells to be printed on a particular worksheet) and these, too, appear in the drop-down list.

3. Getting Started

3.1. A Word of Warning

As with any software accounts package, getting the software set up initially to meet the needs of your charity is, by far and away, the most difficult part – no matter how good the software is. Every charity is different and will have its own particular requirements for the way it wants its accounts to be structured. So whilst there will inevitably be some aspects which are common to most charities, there is no such thing as a “universal software package” which works “out of the box” just the way that suits your charity (and don't let any glib software salesperson persuade you otherwise).

So expect some “hair tearing” and “wailing and gnashing of teeth” as you work out what is going to be best for your charity. It's likely that you will find yourself “tearing up” initial attempts to set thing up which then don't work as you thought (particularly if you are a new charity start-up and have no previous accounts or experience to guide you).

Before being able to use (ie: enter transactions data into) the Simple Accounts Spreadsheet the worksheets you will need to configure to meet your particular requirements are: The Title worksheet The Categories worksheet The Budget worksheet: Note that the Budget worksheet is tightly linked to the Categories

worksheet and the two are best configured together; The Funds worksheet: This can be ignored if you have no requirement to managed

designated and/or restricted funds.

3.2. The “Title” Worksheet

i) click on cell A6 to enter the name of the charity.

ii) click on cell A11 to enter the end-date of the financial year to which the Simple Accounts Spreadsheet relates.

These are the only two items to be entered on this worksheet – don't change any other cells on this worksheet.Thereafter only the financial year end date needs to be updated annually.

Page 11 of 48


The name of the charity and its Financial YearEnd date are replicated throughout thespreadsheet where required.

Note that although a Financial Year typicallyends on the last day of a month, the year-end-date can be set to any date that the charitywishes – eg: 5 April 2012 if the charity wishes tocoincide with the HMRC Tax Year. However,the monthly Budget Reporting dates (seeSection 4.4) are linked to the date of theFinancial Year End (FYE). So a charity whichset its FYE to 5 April would have its monthlyBudget Reports set to the 5th of each month.

3.3. The Categories & BudgetWorksheets

Because they are so closely interlinked, any changes to the Categories worksheet can have significant changes elsewhere in the Simple Accounts Spreadsheet. It is therefore advisableto read also the following Section-3.4 before making any changes to the Categories worksheet.

Categories (called “Nominal Accounts” in accountancy jargon) are the headings under which you identify different sources of receipts (income) and types of payments (expenditure). Although there is no mandatory requirement to do so, it is usual (not least because it makes the charity's accounts easier to understand for the other Trustees) to structure the Categoriesso that related Categories are grouped together.

The Categories worksheet is the “engine room” of the system. It is here that the overall structure for all the Categories are set up, receipts & payments data are accumulated and the budget set up and monitored. You need to have set this worksheet up before you can work anywhere else in the spreadsheet.

Getting this worksheet set up is, by far, the hardest and most time-consuming aspect of usingthis Simple Accounts Spreadsheet. So it is well worth spending some time thinking carefullyabout what categories you require and how they are best organised.

The good news is that, once the Categories are set-up and structured to your requirements, only minimal adjustments should be needed subsequently. All the routine data entry is donein other worksheets.

The category groups in the blank version of the spreadsheet reflect the structure outlined in the Charity Commission on-line guidance for Receipts & Payments accounts

https://www.gov.uk/government/collections/receipts-and-payments-accounts-pack-cc16

Page 12 of 48


The underlying philosophy of the spreadsheet is that is should produce all the information that Trustees need without the user having to export data for “processing” elsewhere.AND The financial reports should be in a form simple enough for Trustees without any special

financial qualifications to understand intuitively; The reports should be easy to produce accurately “on demand” - ie: to be able to provide

them to Trustees on a regular basis to ensure that the charity is managed effectively.

a) Categories – Rows 1 & 2

The headings in these two rows are set by formulae using data set up elsewhere in the spreadsheet and should NOT be altered manually. For example: note the use of the range-name “CharityName” in the formula in cell A1 and the use of the range-name “FYEDate” in the formula in cells H-S1 to calculate and display the Monthly Budget header. And in cells H-S2 the range-name “FYSDate” is used to calculate and display the dates for each of the budget-months in the financial year.

b) Categories – Rows 3 – 120

These rows are used to identify and aggregate the monthly data for each category throughout the financial year.

The cells shaded pink contain formulae and should not be altered.

However, there is no mandatory structure for the layout and content every charity will have itsown particular requirements – some of the initial categories will not be required by all charities, and charities may wish to add additional category groups to meet their particular needs.

IMPORTANT !Many of the cells in the Categories Worksheet are referred to from other worksheets or contain formulae which refer to cells in other worksheets.

So particular rules must be followed when inserting additional Categories or deleting unwanted Categories. Failure to comply with those rules will inevitably cause the formulae to misalign and significantly disrupt the proper functioning of the worksheet.

The rules for removing unwanted rows and inserting additional rows for categories are set out in detail in Section-3.4

c) Categories – The Columns

The contents of the various columns are best illustrated by reference to the “Better Living Charity” example spreadsheet.

You should not add additional columns or delete existing ones.Note that some columns (eg: C, E, G) are left blank to improve readability

Page 13 of 48


d) Categories – Column-A

This column contains a short name (or description) for each category.

You are free to alter these to meet the needs of your charity.

The names can be any valid text BUT THERE MUST BE NO DUPLICATES.That is why, in the examples, each category is prefixed by a sequence number (eg: _R1).In that way it is possible to use the same category name – eg: “Miscellaneous” or “Sundries” – within several groups of categories (as illustrated in the “Categories” worksheet in the blankspreadsheet).

The use of a prefix also ensures that categories are retained in their groups sequence when using other spreadsheet functions (eg: Sort or Pivot Tables), and the use of underscores provides a simple means of indenting categories to improve the visual layout of reports.

Note: the formulae used to transfer the category names into the Budget worksheet make use of the prefix characters (_R, _P, etc) to determine how to display the category name in the Budget Report. If you use different prefixes you will need to adjust the formulae in the Budget page accordingly.eg: if you decide to use “E” (Expenditure) as a prefix instead of “P” (Payments) ,the formulaein Column-A of the Budget worksheet will need to be changed from: =MID(Categories!Ann,FIND(“P”,Categories!Ann),99) to

=MID(Categories!Ann,FIND(“E”,Categories!Ann),99),where “nn” is the relevant row number in the CATEGORIES worksheet, NOT the BUDGET worksheet.

Note also: it is best to avoid special characters (eg: ~#@&) in category names as these can cause problems when encountered in formulae.And it is better to keep the category names as short as possible, both for ease of reading.In particular, long names may not be displayed in full and this will cause difficulties when the differences between category names come towards the end of the name and cannot be seen.

e) Categories – Column-B

The cells in this column calculate the aggregate of all transactions tagged with the corresponding category. It does this across the Bank, Cash & Deposit worksheets for the

Page 14 of 48


year-to-date as selected in Cell-G1 of the Budget Report. It is therefore the overall total for each category, not just the aggregate for one account.

The data are calculated automatically from the corresponding transactions data by the formulae “in real time” and require no other action by the user.The formulae in Column-B must not be altered.

f) Categories – Column-D

The data in this column are the budgets for the year as set/approved by the Trustees for each corresponding category. They are entered manually prior to the financial year and do not normally require any further adjustment unless the Trustees set/approve a major revision of the annual budget during the course of the year.

g) Categories – Column-F

This contains the aggregate budget figure for the year-to-date (of the Budget Report) for the corresponding category.

The data are calculated automatically by formulae from the anticipated cash-flow data in Columns H-S and requires no action other than to set the date of the Budget Report on the Budget worksheet.The formulae in Column-F must not be altered.

h) Categories – Columns H to S

The cells from H4 to S120 are used to set the anticipated monthly cash-flows for each category during the year. These cells are all set initially by formulae to 1/12th of the total budget for the year as set in the corresponding cell in column-D (ie: assumes an even monthly distribution of income/expenditure for each category throughout the year.

However, if desired the monthly budgets can be “flexed” to represent cash-flows which are not regular on a monthly basis. eg: receipts/payments which are made quarterly (such as utility bills); yearly (such as insurance payments) or just irregularly (such as Gift Aid reclaimed in, say, April and December).To achieve that the pre-set formulae are simply over-typed with the budgeted amount (including zero where appropriate) for that category and month.See Section-3.5 for examples.

i) Categories – Column T {Sum Check}

The purpose of this column is to verify that the monthly budget amounts set in columns H-S actually add up to the annual amount set in column DThis is illustrated in rows 4, 5 & 6 of the worksheet;

In row 5 there is a “standard” monthly budget for Donations in which each month is set to 1/12th of the annual amount using formulae.The sum-check cell, T5 therefore displays “OK”;

In row 4 the income from Membership Subscriptions is expected to be £1,500 in January, £750 in June, £250 in November and nothing thereafter. The standard formulae in cells H4:S4 have been over-typed with the appropriate amounts, which add up to £2,500, the Full Year Budget as entered in cell D4.Hence the sum-check cell T4 also displays “OK”;

Page 15 of 48


But in row 6, although the Full Year Budget for Gift Aid (cell D6) has been set to £800, the amounts entered for May and November, £600 and £300 respectively, total £900.This amount (rather than “OK”) is displayed in the sum-check cell, T6, to draw attention to thediscrepancy.

3.4. Removing Unwanted and Inserting Additional Category Rows

The number of rows in the “Categories” worksheet has deliberately been set to rather more than what is likely to be required. That is because it is somewhat easier to remove unused category rows which are surplus to requirements than to insert additional category rows.

a) Links with the Budget worksheet.

The focus of the Categories worksheet is ondata processing and its layout is determined byfunctionality.

The purpose of the Budget worksheet is topresent the charity's financial data in a clearand meaningful way to the Trustees (andanyone else with a legitimate interest).So the focus in the Budget worksheet is onlayout and readability. Just about all the datain the Budget worksheet are not enteredmanually but copied from the Categoriesworksheet,

So before making any changes to theCategories worksheet it is important torecognise that any changes to the layoutand content of the Categories worksheet have consequences for the layout and content of the Budget Report.

Changes to the content of the Categories worksheet (eg: the names of categories) generally get replicated automatically (through the use of formulae) in the Budget worksheet. But removing or inserting rows in Categories worksheet requires complementary changes to be made manually to the Budget worksheet.

b) Removing Surplus Category Rows

Let us suppose that your charity requires only three categories of Voluntary Income – Membership(Subscriptions); Donations; Gift Aid.

Page 16 of 48


The the “default” text in cells A4, A5 & A6 of the Categories worksheet is over-typed with those category names. The remaining rows, 7-11 are redundant.Highlight those entire rows using the left-hand ruler and click on “Delete”

….leaving just the 3 Voluntary Income category rows, as required.

Now move to the Budget worksheet where you will see that the category names text (and any financial data if you had also added that in Categories) for the first three rows under “Voluntary Income” have been automatically updated to match the text and financial data in the Categories worksheet.

The remaining rows under Voluntary Income are redundant and are now showing “#REF!” errors because the cells being being used by the formulae no longer exist, having been deleted in the Categories worksheet.

Highlight those entire redundant rows using the left-hand ruler and click on “Delete”

Page 17 of 48


You will see that the redundant rows have now been removed and the correct calculation of the sub-total for the “Voluntary Income” group has been restored.

c) Inserting Additional Category Rows

If the number of category rows in the blank worksheet are insufficient for your needs (or if you wish to add extra groups of categories) it is possible to insert extra rows, but a bit more care is necessary and it is important that you follow the instructions meticulously.

As with deleting redundant category rows, inserting additional category rows has significant consequences in the Budget worksheet and care must be taken to maintain the synchronisation between the Budget and Categories worksheets.

The most important point to note is that, in order to preserve the correct calculation ofsub-totals for the various groups of categories it is ESSENTIAL that additional rows are inserted in the middle of the existing group and NOT added to the bottom of the group. That is why each group of categories ends with the “default” text

“_Xnn-Inserts to be ABOVE this row”

Although it is possible to insert additional rows at any point within a group of categories (eg: if, having run the spreadsheet for a while, you subsequently find it necessary to insert extra categories) when setting up the spreadsheet for the first time it is safer and easier to decide how many additional rows you are going to require in each category group and to insert them before going any further.

Let us suppose that you require three extra category rows in the group “Voluntary Income”.

Highlight one of the rows with the text “_R1-Set as Required or Delete-n”(Delete-2 has been used in the illustration below).

Click “Copy” (or use Ctrl-C).In MS-Excel ® the row will be highlighted with a broken/flashing border (not shown in the illustration below)

Then highlight the required number of additional rows (in this case, 3) starting from the row BELOW the one you have just copied

And then click “Insert”.

Page 18 of 48


You will now have 4 categories in the group with the name:_R1-Set as Required or Delete-2

Renumber them ….Delete-2a to ….Delete-2d

Move to the Budget worksheet where you will find the secondcategory already renumbered to ….Delete-2a.

Repeat the process exactly as for inserting additional rows forcategories.

Highlight the entire row where the insertion is to be made(,,,,Delete-2a in this example)Click “Copy” (or Ctrl-C)Highlight the number of rows to be inserted (3 in this example) immediately below the row which has been copied.Click “Insert”

The above processes are then repeated to remove surpluscategory rows or to insert additional category rows as required forthe other category-groups.

The above procedures can also be used to remove unwanted category groups or to add additional category groups.

3.5. The Budget & Cash-Flow Data

Once the hard work of setting up the categories structure is complete, the “good news” is thatentering the financial data into the Categories worksheet is simple and straightforward.

Note that the Budget and Cash-Flow data are entered into the Categories worksheet NOT into the Budget and Cash-Flow worksheets themselves.The Budget and Cash-Flow worksheets serve only to aggregate the data and present them in a more “Trustee-friendly” format.

a) Total Annual Budget

The total annual budget for each category of receipts and payments, as approved by the Trustees as part of the charity's Annual Business Plan# is entered into the relevant cells in Column-D of the Categories worksheet.

# Your charity doesn't have an annual Business Plan? It should! In keeping the with the “Simple is Beautiful”philosophy of the “Simple Accounts Spreadsheet”, Small Charity Support believes that the “Simple is Beautiful” approach can also be applied to Business Planning for small charities. Look on the Small Charity Support website, www.smallcharitysupport.uk for its guidance notes on “Why Write Business Plan?”.

Page 19 of 48


b) Cash-Flow Monitoring & Management

Cash-flow management is often presented as if it's a skilled financial function requiring a dedicated individual (or even team) to cope with it.This is nonsense !We all know, and understand from ordinary every-day experience, that if a significant payment (eg: the rent/mortgage, or car insurance) has to be made before the next salary is received that can create problems if, at the time that the payment is due, there will not be enough money in the bank to cover it. And this isn't about “living beyond one's means” and getting into unsustainable debt. The next salary will be sufficient to cover the payment. All that is required is to reschedule some other less urgent payments to a later date to leave enough money in the bank to cover the significant payment on the due date.

The Categories worksheet allows you to make those kinds of forward financial plans to makesure that your charity is always solvent, as required.

The payment of “regular as clockwork” monthly bills is easy.By default, the worksheet automatically divides the total annual budget for each category (as entered into in Column-D) into 1/12ths and allocates 1/12th to each month in the financial year across Columns-H to S.This works fine for regular monthly receipts and/or payments (eg: salaries, telephone bills, regular consumables) and no further action is required.

Where money comes in or goes out less frequently than monthly (eg: quarterly, half-yearly) or just “occasionally” it is also possible to set those patterns of receipts and payments into the Categories worksheet.

c) Examples (from the Better Living Charity spreadsheet}

(i) The charity was anticipating receiving all its £2,500 membership subscriptions in the first 3 months of the year. So it put £2,500 in cell D4 (Full Year Budget); replaced the formulae in cells H4, I4 & J4 with the estimated amounts of subscriptions to be received in those months and put all the other cells in that row to zero. While it was doing that the“OK” in cell K4 (Sum Check) was replaced by the total of the monthly amounts entered sofar until they reached the full year budget total at which point “OK” re-appeared to confirmdata consistency.By the end of the financial year the charity had received £50 more in membership subscriptions than it had budgeted for.

(ii) The charity was going to double the hours, and therefore the salary, of one of the workerson the “Sate at Home” project from July The charity had been promised a supplementary grant to cover those costs payable in August.£11,250 was entered as the Full Year Budget in column D in both the relevant receipts

Page 20 of 48


category and payments category. The formulae calculating the default monthly 1/12th of the full year receipts and payments budgets were over-written manually by the amounts of the grants expected to be received in February and August and the expected receipts on other months manually set to zero. Similarly, the expected monthly payments in Jan-Jun were set manually to £625 and those for Jul-Dec set to £1,250.

This completes the set-up of the Categories worksheet.Once the annual and monthly budget/cash-flow) data have been entered into the Categories worksheet there is no need to return to the Categories worksheet unless the Trustees authorise a change to the annual budget or it becomes necessary to adjust the categories.

3.6. Previous Year Out-turn Data (Budget Worksheet)

The Budget worksheet has provision to hold the previous year's out-turn data if desired for comparison purposes (and if they are available).

The data, obtained from the previous year's accounts, are entered manually into Column-B.

All other data in the Budget worksheet are calculated automatically and the formulae in Columns other than Column-B should not be altered.

3.7. Funds

Use of the Funds worksheet and functionality is optional.No data entry or other action is required if the functionality is not required.However, if “Funds” monitoring/analysis is not required the “Fund” column-B in the Bank/Cash/Deposit/Recurring worksheets must not be deleted – though its width can be reduced or the column “Hidden” completely.

If Fund monitoring/analysis is required, the appropriate fund names must be entered into Column-A of the Funds worksheet and, for funds carried forward from the previous year, the amount brought forward entered into Column-B.

Note that: Cell A9 is the default “General/Unrestricted” fund and MUST be left blank; The Summary data in rows 1-8 and the aggregated data for the year in Columns C-E are

calculated automatically

Therefore the formulae in those cells must not be altered.

4. Normal Daily Use of the SpreadsheetOnce the Categories worksheet has been set up (and not before) you can start entering your day-to-day financial transactions into the appropriate Bank, Cash & Deposit worksheets.

You will not normally need to go back to the Categories worksheet unless: You need to make changes (including additions and deletions) to the categories; You need to make changes to the annual budget and cash-flow.

Note that the spreadsheet is designed on the basis that “regular tinkering” with the budget to take account of variances as they arise IS A BAD THING which undermines (if not actually invalidates) any meaningful monitoring of the charity's financial “health”.The Budget Report calculates and displays the variance between the anticipated and actual cash-flows on an on-going monthly basis. Any significant variances (whether favourable or adverse), particularly those which are cumulative (ie: increasing on a month-by-month basis) rather than self-cancelling (increasing in one month and decreasing in another) should be reported to the Trustees along with an explanation of their cause and potential significance). Changes to the budget would normally only be made in response to a significant change in the financial outlook for the charity (eg: an unanticipated opportunity for a new grant which required a significant change in the

Page 21 of 48


charity's activities). And such changes would normally require the formal approval of the Trustees.

There are two Transactions worksheets, Bank & Cash, for a bank current account and a petty cash account respectively.

They are the “workhorse” of the system. It is here that all transactions are entered.

They work identically – the instructions in this section apply to both.

The Cash transaction worksheet can be ignored (but NOT deleted) if the charity does not operate a Petty Cash system.Or it could be used for a second bank current account instead.

The Deposit transaction worksheet is for those charities which hold their reserves in a separate interest-bearing account. It works in a similar manner to the Bank and Cash worksheets. But, as it is NOT intended to be used as a bank current account or Petty Cash account it has only a very limited number of option in the categories drop-down list.Again, it can be ignored if not required (but NOT deleted).

4.1. The Bank & Cash Transactions Worksheets

The Bank & Cash worksheets work in almost identical ways.This section therefore describes the day-to-day use of both the Bank & Cash worksheet by reference to just the Bank worksheet.

The above illustration shows the three areas of the Bank worksheet in the “Example” spreadsheet.

1: The top area shows the column headings and some of the early transactions in rows 4-13. Rows 14-144 are hidden

2: The middle area shows the latest transactions that have been entered up to row 150 andthe following blank rows where subsequent transactions will be entered.Rows 154-1000 are hidden

3: The bottom area shows the lowest rows for data entry in the worksheet as initially configured for a maximum of 1000 transactions for the Bank worksheet (500 transactions for the Cash worksheet). Those limits can, however, be increased if required. But decreasing them is NOT recommended – it serves no noticeable purpose in terms of improving the speed of operation of the worksheets and creates the risk of introducing unintended errors.

Important Note:Because of the way that the formulae in this worksheet operate, inserting,

Page 22 of 48


removing or moving cells/rows (eg: using “cut & paste” or “click & drag”) WILLresult in misaligned cell references in the formulae and, therefore, incorrect results in the worksheet.

Such alterations MUST therefore NOT be used.

For more detailed information on how to amend, cancel, sort or modify the order of transactions once they have been entered see Section-5 Inserting, Amending, Cancelling & Sorting Transactions.

a) Range Names Used in Bank & Cash Transactions

As previously indicated, the Simple Accounts Spreadsheet makes extensive use of Range Names to identify both individual cells and groups of cells within the spreadsheet.

This makes understanding formulae easier and also minimises risks of references to cells or ranges of cells becoming invalid when making changes to the layout of the Spreadsheet.

In the following instructions the Range-Name applied a particular cell (or, more usually, a column or row of cells) in indicated in the section heading.In the illustrations of the formulae used, references to range-names are given only for those applying to the Bank worksheet (eg: BankTrans). For the equivalent range-name in the Cash worksheet simply substitute “Cash” for “Bank” – ie: the range-name BankTrans becomes CashTrans.

Not all columns have Range-Names associated with them.

b) Setting the Opening Balance

Before starting to enter data into the transactions worksheets you should enter manually into cell H-3 the relevant accounts' Brought Forward balances' from the previous year (these will be zero if you are setting up a new charity). This is the only manual entry required to set up the Bank/Cash/Deposit worksheets to receive transaction data.

This should be the amount shown as the last balance on the bank statement (or equivalent cash record) at close on the last day of the previous financial year.

It will often be the case that some transactions which took place in the previous financial yearwhich have not yet appeared in the bank statement. There are various reasons why this occurs some of which provide “purist accountants” with an opportunity to argue that the Receipts-and-Payments (R&P) “rule” that transactions should only be recorded on the date that “money actually changes hands” (ie: in the year subsequent to the reason for the transaction) even though pragmatists argue that it unnecessarily/unreasonably distorts the charity's accounts.Fortunately, whether the charity takes a “purist” or “pragmatic” approach to dealing with “carried forward” transactions, the spreadsheet can accommodate simply either approach. This is deal with in greater detail in Section-9

c) Data Entry – The Columns in the Worksheet

Column A – Date (BankDate & CashDate):

In this column enter the date of the transaction.The date entered should normally be the date to which the transaction refers – eg: the date that a cheque or invoice was issued, not the date on which the amount appeared in the BankStatement. For Petty Cash transactions (ie: payments) it will normally be the date on which the claim-form was submitted.

Note: where the dates of the transactions are later than the Budget Report Date (see Section-4.4) those dates are highlighted in orange to indicate that those transactions will NOT be included in the current Budget Report.

Page 23 of 48


Although not a requirement, it is usually helpful to keep transactions in date order as far as ispossible (but see note in Section-5 on sorting/moving data).

Column B – Ref (BankRef & CashRef):

In this column enter a reference number for the transaction.

For Bank transactions this typically this will be a cheque or deposit-slip number or for automated transactions (eg: BACS deposits or Direct Debit payments) the Ref might instead be a customer or invoice reference no.

For Petty Cash transactions this will typically be a reference to the claim-form and/or point-of-sale receipt justifying the reimbursement

However, there are no specific restrictions – users may enter whatever reference number or text is most relevant to them.

Column C – Category (BankCat & CashCat)

In this column you MUST enter avalid category name.

When you click on a cell in thiscolumn, a drop-down tab willappear with all of the validCategory names (taken from theCategories worksheet).Click on the tab and select theappropriate category name fromthe drop-down list.

If you try to enter something which is not in the list you will get an error message and will not be able to continue until either you type an appropriate entry or cancel;

Note: the aggregate sums for each category are accumulated by matching the entriesin the cells in this column with the category name. Because of the way that the formulae work, even the slightest discrepancy – eg: an extra space or upper case letter in place of the equivalent lower case letter – will result in a match not being found. In that case the amount of the transaction will NOT be included in any of the summary aggregations.

It is therefore vital that you select ONLY a valid category from the drop-down list to be entered in the cells in this column.

Page 24 of 48


Column-D – Fund (BankFund & CashFund)

This operates in a similar manner to the Categories column-C.When you click on the cell a drop-down list of all the valid Fund-tags (taken from the “Funds” worksheet) will appear from which you choose the relevant entry.You will not be able to move on if you try to enter a tag which is not in the “Funds” list.

However, unlike the Categories tag, the default entry is blank, signifying that the applicable Fund is the unrestricted General Fund.

If you do not require Fund Management facilities this column can be ignored (but must be leftblank). If you wish, you can hide the column but IT MUST NOT BE DELETED.

Column E - Payee

In this column enter who the payment is being made to or being received from.

Note: You will find subsequent analysis of the data MUCH easier if you are very consistent in the way that you enter payees (and other data, too);For example: if the first time you enter a payee you enter their full name, surname first (eg: SMITH, John) then always use exactly the same format each time for all names including the use of upper/lower case(ie: NOT: J.SMITH, SmithJ, or smith, john).

Column F – Comment

In this column enter any further relevant information about the transaction.This is a free-text field (ie: there are no special constraints on what can be entered here) but, again, it is helpful to maintain consistency of style/format whenever possible.

Column G – Amount {BankTransAmnt & CashTransAmnt)

In this column enter the amount of the transaction;Receipts are entered as positive numbers (eg: 123.45 – a preceding + is not required);Payments are entered as negative number (eg: -123.45) and will be displayed in red;It is not necessary/desirable to include a £ sign.

Column H – R'd (BankRd & CashRd)

This column is used to reconcile transactions with your bank statements or cash slips (ie: confirm that the record in the worksheet is consistent with other documentary evidence ofthe transaction).

For more information on reconciling transactions, particularly as a mechanism for validating the accuracy of your financial data, see Section-4.1.e

Any character in this column indicates the transaction has been reconciled;However you will probably find it helpful to use a different character for each month's reconciliation (eg: 1 for Jan, 2 for Feb, etc.);

Transactions which are cancelled – eg: a cheque which is written in error – can be marked as“C” in this column to prevent it appearing when filtering for outstanding transactions (ie: thosewhich have not yet appeared in the Bank statement – perhaps because someone had forgotten to (or decided not to) present a cheque to their bank or an outstanding unpaid invoice to a “tardy” client.

See also the note below on filtering to hide transactions that have already been reconciled to make it easier to see the outstanding transactions;

Page 25 of 48


For items that don’t appear in the bank statement (eg: cancelled cheques) it might be useful to mark those as reconciled with a particular character (eg: “C”, as in the item in row 51 & 52 of the example worksheet);See also the notes in sections 5.3 Deleting an Existing Transaction & 5.4 Cancelling an Existing Transaction

Column I – Transactions Running Balance

This column shows you a notional running bank balance as transactions are added to the spreadsheet. It is the amount which will be in the bank account when all committed receipts have been received and deposited and all committed payments have been made.

However, because the order in which transactions are added to the spreadsheet will generally differ from the order in which they are presented to the bank, the running transactions balance for a particular transaction in the spreadsheet will not always replicate the running balance in the bank statement for the same transaction.

This is particularly important if there are delays in a committed receipt (eg: a major grant, or significant payment from a client) being paid into the charity's bank account. In such situations the actual bank account can still go overdrawn even though the running bank balance in Column-I is showing the account to be always in credit.

d) Multi-Item Transactions:

Some transactions will be for multiple items which have to be assigned to different categories- eg: if you are paying a supplier with one cheque for several items or paying in receipts from several different sources.

Unfortunately, in this simple system it is not possible to group such multiple items together into a single transaction. They each have to be entered separately.But it is OK – in fact, desirable - to use the same reference number for all the multi-items to identify them as a single transaction. Indeed, where payments under different categories are made by a single cheque, or several different sources of income are deposited at the bank at the same time the separate transactions will naturally all fall under the same cheque or deposit-slip number. Multi-item transaction having the same date and reference number will then be grouped together in the Bank or Cash transactions worksheets when the transactions are sorted by date and transaction reference number.

When it comes to reconciling multi-item transactions, particularly those related to bank transactions, only the total amount of the transaction (ie: not the individual items) will appear in the bank statement. However, it is easy to check the total amount against the multi-transactions entered into the worksheet, as follows:

In the example worksheet for Bank transactions, the transactions at rows 58-59 represent a payment of £96.40 by single cheque, no:100612 to G.Logman for 2 travel expenses of £90.80 and £5.60 attributed to different projects and, therefore, to different categories.

Highlighting the 2 individual amounts in column F shows the total amount of the cheque in the status bar (if you have it turned on to display) at the bottom of the screen.

Page 26 of 48


e) Reconciling the Transactions Worksheets

The Bank and Deposit worksheets both provide a simple direct method of reconciling the transaction in the worksheet with the transactions reported in the bank statements (ie: confirming that the amounts recorded in the relevant bank statement – including the balance in the bank account – are consistent with what is recorded in the transaction worksheet).Note: The Cash worksheet also has a “Reconciled” column, but this is primarily for consistency with the other two transactions worksheets and is generally not used.

At the top the Bank worksheet isa group of cells which provide a“real-time” summary of the statusof the bank account – ie: they getupdated automatically each timea new transaction is entered orreconciled with the bankstatements.Balance (Cells K2 & M7): Show the amount in the bank account once all anticipated

(ie: entered into the transaction worksheet) have been presented and processed;Reconciled (Cell L2): Shows the net amount of transactions (deposits & payments) which

have been confirmed with the transactions in the bank statements;Unreconciled (Cell M2): Shows the net amount of transactions (deposits & payments) which

have not yet been confirmed with the transactions in the bank statements;Creditors (Cell M3): Shows the gross amount of payments not yet confirmed with the bank

statements;Debtors (Cell M4): Shows the gross amount of receipts/deposits not yet confirmed with the

bank statements;Receipts (Cell M5): Shows the gross amount of all receipts (confirmed and unconfirmed);Payments (Cell M6): Shows the gross amount of all payments made (confirmed and

unconfirmed).

This makes reconciling the transactions worksheets with the bank statements and so should be done regularly – usually each time the bank produces a statement.

Reconciliation is important for two three reasons: It identifies any errors which have occurred, either in making entries in the worksheets or

by the bank; It identifies transactions which have not been completed as expected – eg: a cheque

which has been issued by the charity but has not been presented to the payee's bank; aninvoice issued to a customer/client has not yet been paid (ie: it provides a simple form of credit control);

It confirms that the amount of cash actually in the bank account at any point in time corresponds with the amount expected to be in the bank account at that time.

The following instructions assume that you will reconcile the transactions worksheets with thebank statements each time you receive a bank statement (eg: at least monthly).

i) Check that the opening (brought forward) balance on the first day of the current bank statement is the same as the Reconciled Balance (in cell L2 of the transaction worksheet). This confirms that the previous reconciliation was complete up to the closingdate of the previous bank statement;

ii) Working through each individual entry in the bank statement from first to last, locate the corresponding transaction in the worksheet and confirm that all the details of the two entries correspond;

iii) If that is the case, confirm the reconciliation by entering an appropriate character (or characters) into the R'cd cell for that transaction (Column-H).

Page 27 of 48


There is no restriction on what characters you can use, but it is strongly recommended that you use 1-12 to indicate the month of the bank statement being reconciled. This makes going back and checking much easier should it be necessary;

iv) As you mark each transaction in the worksheet as reconciled with the bank statement in this way the value in the “Reconciled” cell (L2) updates automatically and should show the same value as the running bank balance for the transaction in the bank statement. This provides a very simple validation “in real time” that the transaction worksheet and the bank statement are synchronised. Any discrepancy indicates either a transaction has been missed (a common cause of that type of discrepancy is a BACS deposit being made into the bank account without being entered into the transactions worksheet) or a typing error somewhere;

v) When you reach the end of the bank statement the closing balance there should be the same as the Reconciled value in Cell-L2 confirming exact correspondence between the entries in the transaction worksheet and the records in the bank statement.Note, however, that this only works in that way if you go record-by-record through the bank statement to check them against the transactions worksheet.The the order of transactions usually differs between the transactions worksheet and the bank statement. So if (as many people do) you instead go through the transactions worksheet record-by-record to check them against the bank statement there is no guarantee that the running balance in the bank statement will correspond with the reconciled value in Cell-L2. Then, if you get to the end of the reconciliation and there is still a discrepancy, you have no indication of where/why the discrepancy occurred.

f) Analysing the Transactions Data and Making Necessary Adjustments

More in-depth procedures for analysing the transactions data, including: Sorting the data into different orders (eg: by category, fund, payee, amount); Filtering the data to select only transactions with particular characteristics; Correcting errors;are covered in detail later in Section-5.7 (Sorting) and Section-6 (Filtering)

4.2. Cash Transactions

The Cash worksheet works in the same way as the bank worksheet.

Someone (usually, but not necessarily the Treasurer) periodically checking the transactions recorded in the worksheet, the petty cash vouchers in the records book and the amount of cash in the Petty Cash Box operates in essentially the same way as reconciling the Bank worksheet with the bank statements.

The only issues to particularly note are where it is necessary to transfer more money to the Petty Cash Box.

a) Imprest Account:

The Cash worksheet is not designed specifically to function as an Imprest Account – ie: one in which the notional cash value of the Petty Cash Box (the sum of the cash vouchers recording cash spent and the actual cash in the Box) is always maintained at a constant level. This is achieved by periodically replenishing the cash in the box with the amount recorded by the vouchers as having been spent.But neither does the design of the Cash worksheet prevent it from being used with an Imprest Petty Cash account.

b) Transferring Money from the Bank to the Cash Account

Topping up the money in the Petty Cash account is the nearest that the Simple Accounts Spreadsheet gets to “Double Entry Bookkeeping”.The money transferred is recorded as an outgoing “Transfer to Cash account” in the Bank

Page 28 of 48


transactions worksheet and as an incoming “Transfer to Cash account” in the Cash transactions worksheet. These then automatically cancel each other out when aggregating the net cash assets of the charity and do not get interpreted as additional receipts or payments.

c) Entering Transactions

Expenditure from the Petty Cash account gets recorded in the Cash worksheet, along with details of the categories of expenditure, payee, comment and amount in exactly the same way as in the Bank transaction worksheet. This means that expenditure through Petty Cash gets recorded and aggregated into overall expenditure “in real time” along with expenditure through the Bank. It also means that, when running the Petty Cash as an Imprest Account, there is no further need identify what the money had been spent on when replenishing the Petty Cash from the Bank account. That had already been done (and aggregated into the charity's expenditure) at the time that the Petty Cash was withdrawn.Of course, if the charity wanted to run its Petty Cash account as a “pure” Imprest Account and only document the expenditures as part of the replenishment of the Petty Cash account, it is perfectly possible to do that, too (in which case the Cash transaction worksheet would probably not need to be used).

4.3. Deposit Account

This worksheet is for charities which have sufficient reserves to justify holding them in a separate interest-bearing account.

The worksheet is therefore designed on the assumption that only three types of transaction will relate to the account: Transfers of excess reserves to the Deposit account; Transfers of reserves back to the Bank account; The receipt of interest payments.

Accordingly, only those three options are displayed in the “Categories” column drop-down list.

As with transfers between the Bank & Cash accounts, transfer between the Bank & Deposit accounts are recorded as an outgoing “Transfer to Deposit account” in the Bank transactions worksheet and as an incoming “Transfer to Cash account” in the Cash transactions worksheet (and vice versa when transferring funds from the Deposit account back to the Bank Account). These then automatically cancel each other out when aggregating the net cash assets of the charity and do not get interpreted as additional receipts or payments.

4.4. The Budget Worksheet

The Budget worksheet producesa budget report summarising thecharity's financial activity up tothe date selected.

Once the initial data have beenset up as described in Section-3.4.a, all that is necessary is toclick on the Budget Report Datecell (G1) and select from thedrop-down list (see insert) thedate up to which the Budgetreport is to be calculated.

The data in the Budget Reportare updated automatically “in real time” as transactions are entered into the spreadsheet. So the Report is always as up-to-date as the transactions which have been entered.

Page 29 of 48


The columns in the Report are, for each corresponding category: Prev.Yr Out-turn: The final result at the end of the previous financial year; This Yr.Budget: The total year's budget for the current year; Budget to {date}: The budget for the current year to the date of the report; Actual to {date}: The actual receipts/payments for the current year to the date of the

report; Variance: The difference between the budgeted figure and the actual figure to the date

of the report. Note that favourable variances (ie: leading to an end-of-year surplus) are always shown a positive (black) and adverse variances (ie: leading to an end-of-year deficit are always shown as negative (red).

This means that up-to-date Budget Reports can always be produced literally by just a few mouse-clicks. So Trustees (and anyone else with a legitimate interest – eg: major donors) can always be provided with Budget Reports, both at regular meetings and “on demand”.

Note that any month within the current financialyear can be selected for the Report Date.

If a date is selected which is before the date of the last transaction the transactions which are NOT included in the Budget Report have their transaction dates highlighted, as previously noted in Section-4.1.c

4.5. The Cash-Flow Worksheet

The illustration above is taken from the “Better Living Charity” example worksheet.

Page 30 of 48


Like the Budget Report worksheet, the Cash-Flow worksheet is designed to present aggregated financial information for Trustees in an easy-to-use format, both as a table and as a graph. And, like the Budget Report, the Cash-Flow Report data are produced automatically from the Bank & Cash transactions data (up to the Budget Report Date) with noadditional input required. So the Cash-Flow Report is always up-to-date provided that the entry of transactions data is up-to-date.

It is, however, a very high-level of aggregation – calculating just the monthly actual gross receipts & payments (cash flow) across all categories and, hence, the net surplus/deficit and resultant net cash assets on a month-by-month basis. It also calculates the same information from the monthly budget data provided in the Categories worksheet to enable Trustees to monitor the financial performance of their charity “in real time” by providing direct comparison of the monthly actual cash-flow with the anticipated (budgeted) cash-flow.

Note:

● The net cash assets data include the total of the cash amounts entered as “Brought Forward” at the beginning of the financial year in Cells-I3 in the Bank, Cash and Deposit worksheets.

● On the Cash-Flow chart: Anticipated monthly receipts &payments are shown with lightly shaded columns; Actual monthly receipts & payments are show with darkly shaded columns; The anticipated monthly net cash assets is shown as a broken line; The actual monthly net cash assets is shown as a solid line: The actual monthly net cash assets after the Report Date continue to be displayed as

a horizontal line at the level of the last actual figure.

5. Inserting, Amending, Cancelling & Sorting Transactions

5.1. Inserting a New Transaction.

To enter a new transaction go to the first empty transaction row and enter the data there.

If the new transaction would be out of sequence with previously entered transaction (eg: if the date of the new transaction is earlier than the dates of transactions already entered, DO NOT ATTEMPT TO INSERT A NEW ROW at the relevant point in the worksheet as this will create misalignments in the formulae and consequent errors in the calculations.

Instead, enter the new transaction at the end of the existing transaction and then use “Sort” (see section 5.7 Sorting Transactions below) to re-locate it to the correct place.

5.2. Amending an Existing Transaction

If the data in an existing transaction are incorrect, simply over-type them with the correct values. Any consequent changes in the summary data (eg: in the Categories and Budget Report) will be made immediately and automatically.

If the amendment is to the date of the transaction and it is desired to relocate the transaction to the correct date-order, use “Sort” (see section 5.7 Sorting Transactions below).

5.3. Deleting an Existing Transaction

If a previously entered transaction is found to be completely incorrect and no longer required DO NOT ATTEMPT TO REMOVE IT BY DELETING THE ENTIRE ROW as this will create misalignments in the formulae and consequent errors in the calculations.

Page 31 of 48


Instead, highlight just the transaction data cells in columns A to H (BUT NOT THE RUNNING BANK BALANCE IN COLUMN-I) and delete their contents using the [Delete] key.

This will leave that row intact, but the cells empty. This may also cause the error #VALUE toappear in the subsequent running balance figure, Column-I. However, this error will be cleared when the now empty cells are relocated to the end of the transactions records by following the “Sort” procedure as described in section 5.7 below.

5.4. Cancelling an Existing Transaction

Where a cheque or invoice is written in error and cancelled without ever being issued, some book-keepers/treasurers/accountants/examiners like that to be entered into the transactions record for reference purposes and to show that the cheque/invoice is not missing or outstanding/un-presented/un-paid.

That can be done by creating a transaction with the cheque/invoice number as the reference number, the Payee/Details as “Cancelled”, the amount as zero and Reconciled (“R'cd”) set to“C”. Such parameters will ensure that the cancelled cheque/invoice is “visible” in the transactions records but does not otherwise affect the accounts as the transaction amount is zero.

5.5. Abandoned Payments

It sometimes happens that a cheque to reimburse expenses is issued but the recipient decides to not cash it but instead to leave their reimbursed expenses as a donation. It is suggested that, rather than cancelling the transaction, a counter-balancing transaction for thesame amount (with the same date & cheque number for linking purposes) is entered as a donation. This results in a net transaction amount of zero (ie: no change in the bank balance) and a record of both the expenditure and the donation.

Whilst this might, at first sight, seem a bit futile (as there is no net change in the bank balance) it actually has several key advantages:

It allows the charity to keep a record which demonstrates the true cost of running the charity rather than figures which are significant under-estimates because of legitimate expenses claims being waived;

It allows the charity to demonstrate in financial terms the generosity of its supporters;

NOTE:Donations-in-kind (eg: legitimate, but unclaimed, travel expenses) are not eligible for Gift Aid (which only applies to monetary donations).HMRC rules on donations-in-kind – eg: unclaimed expenses - are explicit and strictly enforced. They are NOT eligible for Gift Aid.If someone wishes to “waive” their expenses as a donation in order that the charity can claim Gift Aid on them, they MUST FIRST claim the expenses and THEN VOLUNTARILY return the reimbursement as a donation.

That, in itself in understandable and reasonable to prevent fraud.

But as an amazing example of bureaucratic pedanticism, HMRC requires that, in order to be eligible for Gift Aid, “real money (in as much as cheques, or BACS transfers, or even promissory notes are “real money”) must have changed hands”. ie: there must be documentary evidence (eg: in the form of bank statements) that the expenses payment actually left the charity's account and the donation actually left the donor's account.This, ostensibly, is to provide a clear record of the expenses having been legitimately

Page 32 of 48


claimed, reimbursed and then given as a donation (ie: were not a gift-in-kind).The fact that separating the reimbursement of an “expense” and it's subsequent donation as a Gift-Aided gift actually makes it easier, rather than harder, to conceal the misclaiming and subsequent donation of “expenses” as a way of illegitimately exploiting Gift Aid seems to have been overlooked by the pedants at HMRC.Small Charity Support is hoping to persuade HMRC to reconsider its position on the claiming of expenses and then giving them back as a Gift-Aided donation. But resolution of the issue is not likely to occur in the immediate future..

5.6. Moving Transactions

DO NOT attempt to change the order of transactions using “click & drag”. This creates mis-alignments in the formulae and consequent errors in the calculations.

Instead, use the “Sort” function, as described in the next section.

5.7. Sorting Transactions

Sorting transactions into, say, date order is relatively easy provided that you use the built-in Data/Sort function.

Although both MS-Excel and OpenOffice Calc perform Sorts in the same way, the appearance of the commands is somewhat different.

Note that the following illustrations are taken from an earlier version of the spreadsheet which did not include the “Funds” column.This does not affect the validity of the illustrations.

The most common sort will be to put transactions in descending date order (ie: earliest at thetop, latest at the bottom) and it is usual to include the transaction reference number and transaction category in the sort, too, so that related transactions are ordered together.

a) In the top-left corner of the Bank (or Cash) transactions screen, click on the cell-identification box (immediately above column-A) and select “BankTrans” (or “CashTrans”) from the drop-down window.This will select the entire range of Bank transactions in columns A:G.

b) Click on Data/Sort in the main menu and then select the column(s) by which you want the transactions sorted, eg:to sort into date order select column-Ato include Ref No order add column-Bto include the category add column-C.

Page 33 of 48


c) The order of columns selected does NOT have to be alphabetical – it is your required priority order for the sort.

If it is not required to sort on all three parameters the second and third specification can be Deleted (MS-Excel) or left as “ - undefined - “ (OpenOffice Calc).

Similarly, if it is desired to sort on more columns they can be added.

d) Click on [ OK ] to complete the sort.

e) It is possible to sort on any columns in any order of priority in this way.eg: it can be useful to sort on Column-C, Category, followed by Column-A, Date, to bring together all the transactions relating to the various categoriesOr to sort on Column-D, Payee, followed by Column-A, Date, to bring together all the transactions relating to individual payees.This can be particularly valuable for answering more detailed enquiries about income and expenditure than can be answered from the Budget Report, eg: enquiries about expenses reimbursements to individual trustees, or income/expenditure on service contracts with specific providers or commissioners.Once the detailed enquiry has been answered, the transactions can then be re-sorted back into the usual order in the usual way.

Technical Note: Unlike the “Cut & Paste” or “Click & Drag” procedures for moving cells, using the built-in Data/Sort function does not alter the formulae in columns H & J and so using this method to sort the data does not result in formulae becoming mis-aligned.

It is also possible to use the same approach to sort just a specific range of rows.Rather than selecting BankTrans, just select all the cells in columns A:G in the specific rows that you want to be sorted and then proceed as in steps b & c above.However, it is strongly recommended that this approach be avoided and it is the entire transaction records which are sorted whenever possible.

6. Filtering TransactionsThe Simple Accounts Spreadsheet has data filtering set-up to allow just selected transactionsto be displayed. Although MS-Excel® and OpenOffice Calc® filter in similar ways the are some important differences in the way that the filtering is selected and controlled.

Note: as with some earlier illustrations, the following illustrations are taken from an earlier version of the spreadsheet which did not include the “Funds” column.This does not affect the validity of the illustrations.

6.1. Filtering On A Single Criterion.

Next to each of the column headings (in row 2) is a drop-down button.

Click on one of the drop-down buttons (eg: Category) and a list of all the various types of entries in that column appears.

Page 34 of 48


In MS-Excel, first uncheck the [Select All] box, then scroll down and click on the entry for which you wish to see just those transactions, and then click [ OK ].In OpenOffice-Calc just click on the required entry.In this example, all the transactions allocated to __P2-HM-Project Costs will be selected.

All other transactions are temporarily hidden.

6.2. Filtering On Multiple Criteria.There are significant differences between MS-Excel & OpenOffice-Calc for filtering on multiple criteria

a) MS-Excel

To filter on multiple criteria in the same column, simply check allthe required criteria in the drop-down list.Click on [ OK ] to complete the filter

To filter on multiple criteria in different columns, simply repeatthe filtering process for all the required columns.

Note: There is an Advanced filtering function in MS-Excel but its useis beyond the limitations of these instructions.

Page 35 of 48


b) OpenOffice-Calc

In OpenOffice-Calc select the “Standard Filter” option in thedrop-down list and then complete the selection criteria in thepop-up window.

Note that in OpenOffice-Calc the “Standard Filter” option allowsyou to select filter criteria for different items in both the samecolumn and different columns simultaneously. It also providesboth AND & OR options for linking multiple criteria.

c) Both MS-Excel & OpenOffice-Calc

Clicking on [ OK ] displays just those transactions which match the filter criteria

All other transaction types are temporarily hidden.

6.3. Removing Filtering.

MS-Excel: OpenOffice Calc:Click on Data/Filter/Clear Click on Data/Filter/Remove Filter

and the full transaction listing is restored.

6.4. Running Balance (Column-I)

Note that the values in the running balance, (shown as column-H, rather than

column-I, in these earlier illustrations), remain the values that they have when all the transactions are displayed un-filtered – ie: they are NOT a running balance just for the filtered entries.

6.5. Filtering Unreconciled Transactions

It is frequently useful to be able to display just those transactions which have not yet appeared in the bank statement and are therefore outstanding. eg: cheques which have notyet been presented by the payee; invoices for goods/services which have not yet been paid.

MS-Excel:Click on the filter drop-down

button for the R'd Column-G

Uncheck the (Select All) box

Then scroll down if necessary and check the (Blanks) box

Click [OK]

OpenOffice Calc:Click on the filter drop-down button for the R'd

Column-G

Click on “Standard Filter”

In the pop-up window ensure that the “Value” field is set to “ - empty -” (scroll up if necessary);

Click [OK]

Page 36 of 48


Just the unreconciled transactions in rows: 61, 71, 85, 122, 139 & 145-7 are displayed.These can then be chased up as appropriate.

The sum of the transactions amounts are as shown in the Unreconciled Transactions cell L2 at the top of the spreadsheet.In this example there are no outstanding receipts (debtors) due, only outstanding payments (creditors).

6.6. Advanced Filtering

Both OpenOfficeCalc® and MS-Excel® provide Advanced Filtering functionality to allow moresophisticated filtering and analysis of data. However, such functionality is beyond the scope of these instructions and should only be undertaken by Users who have the requisite level of expertise in spreadsheet management.

7. Recurring TransactionsThis worksheet can be used to hold sets of regularly recurring transactions (eg: monthly utilities/services bills or subscription payments) to facilitate data entry by avoiding the necessity to re-create the transactions on each occasion. Instead, all that is required is to enter the transaction-specific data (eg: the date & reference number of the transactions and, in some cases, the amounts), the information which is the same each time (eg: the category, payee and description) being already in place.

This worksheet is not directly referenced by any other worksheet.The information in it is only ever transferred to other worksheets manually. If it is not required the entire worksheet can safely either be ignored or deleted entirely.

Page 37 of 48


7.1. Regular Individual Transactions (Row 7)

This row illustrates how single recurring transactions – whether they recur regularly (eg: on the same day for the same amount each month) or occasionally (on different dates and/or fordifferent amounts) can be pre-set up in this “Recurring” worksheet and then simply copied/pasted as required into the relevant “Transaction” worksheet.

7.2. Regular Grouped Transactions (Rows 14-16)

These rows illustrate a group of regularly recurring transactions which all occur at (or about) the same time, in this example a salary payment which is spread over several different categories.

All the transactions in the group can be copied and transferred/pasted into the Transaction worksheet at the same time (ie: by highlighting all three rows for Copy&PasteSpecial). Note that, in this example, the formula =A14 is used in cells A15 & A16 (coloured pink) to copy the date entered for the first transaction in the group down into the other associated transaction occurring at the same time. When copying these cells to the Transactions worksheets, these formulae MUST be removed (by using “Copy & Paste-Special”, rather than simple “Copy & Paste”) otherwise problems will occur when trying to sort the Transactions data.

7.3. Regular Grouped Transactions with Calculations (Rows 22-29)

These rows illustrate how users with more expertise in the use of formulae can use the Recurring worksheet to set up more sophisticated transactions for transfer to the ordinary Transactions worksheets.

The transactions illustrated here (rows 22-24) hold the GROSS salary payment to a member of staff allocated across several different expenditure categories – general administrative cost, a restricted project fund, fundraising costs.

Rows 25 & 26 show the employee's PAYE & NI deductions from the gross salary transferred to a holding category (_U-HMRC PAYE&NIC) for subsequent payment to HMRC.

The sum of cells F22-25, £638.58, is therefore the NET salary paid to the employee on 15-Oct-15 by cheque 2356, the date and cheque number being replicated from row 22 into rows 23-25 by the use of the formulae =A$22 & =B$22 respectively.

Page 38 of 48


Rows 26-29 show the subsequent payment to HMRC of the employee's PAYE & NIC (as deducted at row 25) plus the employer's NIC

The total employer's NI contribution associated with this salary payment is entered into cell I23 and gets allocated to each of the salary expenditure categories pro-rata to the gross salary allocated to each category by use of the formula =-$I$23/SUM($F$22:$F$24)*F22

Not all users of the Simple Accounts Spreadsheet will require this level of sophistication.This illustration is simply to give more experienced users some ideas of the ways that the Recurring worksheet can be used to avoid the necessity to re-enter “from scratch” regularly recurring transactions, particularly where those transactions involve the allocation of expenditure (or income) over multiple categories.

NOTE: Although it is OK to use more sophisticated formulae in the way illustrated (cells highlighted in pink) within the Recurring worksheet, such formulae MUST NEVER BE TRANSFERRED to the regular transactions worksheets.

The use of formulae in this way in the Transactions worksheets will cause no end of difficulties.

It is therefore ESSENTIAL that, when transferring recurring transactions to the relevant transactions worksheet, you NEVER use “ordinary” Paste, but always:

Paste-Special-Values in MS-Excel (a “screen-grab” illustration is not available);

orPaste-Special, Text+Number+Date&TimeONLY (never Formulae or Formats) inOpenOffice-Calc, as illustrated.

Page 39 of 48


8. Annual Accounts WorkSheetThe Annual Accounts Worksheet is included just to illustrate how the “open source” nature of the Simple Accounts Spreadsheet can be exploited to aggregate & present the organisation'sfinancial transactions in a variety of ways to suit the needs of the Trustees.

For example: as well as formatting the organisation's assets in a form which can be “cut & pasted” directly into the organisation's Annual Financial Statements, a print-out of the Annual Accounts Worksheet can also be included along with the Treasurer's regular reports to the Trustees.

Like many other worksheets, the Annual Accounts worksheet is updated automatically “in real time”each time you enter a transaction and so it is always immediately available.

The Annual Accounts WorkSheet will need to be tailored to the individual needs of each user-organisation.

Note: The Annual Accounts worksheet is NOT referred to from anywhere else in the spreadsheet. So, If it is not felt to be appropriate/useful it can safely be ignored, used for other purposes, or simply deleted.

9. Dealing with Transactions Across Different FinancialYears.As indicated in section 1.3.e Receipts & Payments vs Accruals Accounts, a common problemwhen using simple Receipts & Payments accounts is how to deal with transactions which occur in one year but actually relate to an activity which occurs in a different year (usually thepreceding or subsequent year).

This is a long-standing issue. Some sections argue that such problems render Receipts-and-Payments accounts inadequate and that ALL accounts, regardless of the size of the charity, should be managed on the accruals bases. Other sections argue that accruals accounts are unnecessarily complex for the non-professional Trustees of small charities to understand properly, thereby undermining their legal responsibility for the prudent management of their charity.

This issue was reviewed back in 2008 by the Charity Finance Group:http://cfg.org.uk/~/media/Document%20library/01%20Accounting/01%20Charity%20Accounts-%20Financial%20Statements%20and%20Annual%20Returns/The_Use_of_Receipts_and_Payments_Accounts_for_Financial_Reporting_by_Smaller_Charities_0908GMIS0001.ashx

Although there have been some slight improvements since then, the issues (and problems) essentially remain the same.The problems can arise in a variety of ways, and with different impacts.

The Charity Commission guidance on Receipts & Payments accountsPublication CC16b Receipts and Payments Accounts: Introductory Notes

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/352874/cc16btext.pdf

recognises this problem and the distortions that it can create if a large payment is made in one year but relates to another, resulting in an unusually large deficit in the year in which the payment occurs and a correspondingly usually large surplus in the year to which the payment actually relates (and vice versa where a large payment is received “out-of-year”).

For that reason, the guidance notes CC16b say that statement of assets and liabilities to accompany the Receipts & Payments accounts of a charity....:

....should include a summary of the assets and liabilities held by the charity.....Other monetary assets may include: • tax reclaim(s) due;

Page 40 of 48


• recoverable grants and charitable loans due to the charity; and • other debts (recoverable amounts) due to the charity.Liabilities may include: • taxes due +but not yet paid; • amounts due to staff for wages, salaries, etc; and • suppliers’ accounts not yet paid.

Although not suitable for formal accruals accounting, (eg: for charitable companies and other charities where their constitution requires that their accounts be on an accruals basis) the Simple Accounts Spreadsheet for Small Charities can accommodate, on a Receipts-and-Payments basis, most of the situations where transactions spill over from one financial year to the next.

In the following examples the financial year of the charity is 01-Jan to 31-Dec

9.1. Example 1: Delay in presenting a cheque

You write a cheque to pay someone for goods/services/expenses early in December, but the recipient does not pay it into their own account until the following January (or later). The payment relates to the previous year but does not appear in the bank statement (and, therefore, in the amount of cash in the bank at the end of the financial year) until the following year.

In cases like this the payment is regarded as having been made on the day that the cheque was dated and signed for the purpose of entering the transaction into the spreadsheet. So cheques which are un-presented at the the end of the year like this still get accounted for in the current year's annual accounts.

However, because such un-presented cheques (and similar transactions) are unreconciled atthe end of the financial year they create a discrepancy between what the accounts show as being in the bank account and what the bank statement shows as being in the account.

As described in section 6.5 Filtering Unreconciled Transactions, the Simple Accounts Spreadsheet can produce a report of the unreconciled transactions at any point. This is particularly useful at the end of the financial year, so that the Independent Examiner of the accounts can easily validate any end-of-year discrepancy between the accounts and the bank statement.

In addition, the Simple Accounts Spreadsheet includes facilities to allow such unreconciled transactions to be carried forward to the next financial year to allow them to be properly reconciled with subsequent bank statements. The process includes re-categorising the transactions as U-PFY Unreconciled (PriorFinancialYearUnreconciled, as described in a latersection 10.2 Delete Reconciled Transactions) to ensure that they do not get “double-counted”or distort the following year's accounts when they do eventually appear in the bank statement.

9.2. Example 2: Delay in depositing payments

This can occur when payments to the charity are received by the charity too late to be banked before the end of the financial year.

They can be treated in the same way as cheques which are delayed in presentation (as above), ie: entered as transactions into the spreadsheet as having been received on the day that the payment arrived. They will similarly be unreconciled against the end-of-year bank statement and included in the unreconciled transaction report for validation by the Independent Examiner. They will also be carried forward into the following year's accounts re-categorised as unreconciled transactions (U-PFY Unreconciled ) for checking off against subsequent bank statements.

Page 41 of 48


9.3. Example 3: Late arriving receipts and claims for payments

In a perfect world everyone will get in their claims for payments, or pay their bills, before the end of the financial year to which they relate.

But in the real world this doesn't always happen !!In such cases a pragmatic solution may be needed.

If the late arrival of a bill or payment is not too long after the end of the financial year it might be possible to enter it retrospectively (ie: date the transaction as of 31 December) and then treat it as an unreconciled (delayed presentation) cheque or deposited receipt as in sections9.1 & 9.2 above. However, it would be wise first to check with your Independent Examiner that he/she would be willing to accept that.

If not then there is little alternative but to include such late arrivals as transactions in the following year's accounts. If they are “immaterial” - ie: are for small amounts that would not distort the overall accounts for the current year then they are just entered as a normal in-yeartransaction. But if they are large enough to be “material” you will need to add one or two additional categories to record transactions left over from a previous year to avoid distorting the budgets for the current year. And you may also need to include an appropriate explanatory note to the accounts, both the previous year's accounts (if it is not too late) as well as the current year's accounts.

Note that payments of any nature to Trustees must always be treated as “material” irrespective of the amount. So it is important that all Trustees understand that they must set a good example and always make sure that their expenses claims are made in good timebefore the end of the financial year to which they relate.

9.4. Example 4: Regular Payments in Advance

This situation typically arises where, for example, your charity rents premises on a quarterly basis – an office, or an activity hall – and is required to pay each quarter's rent in advance – eg:-the rent for the quarter, Jan-Mar, is due on or before 31 Dec end of financial year date. To avoid holiday period delays, you pay the next quarter's rent on 15 Dec. So you have made a payment in this financial year for an expense which relates to the next financial year.

The Receipts & Payments method of accounting makes dealing with this very easy.This kind of payment recurs each year with no more than minor increments to the amount due to inflation. The payment in advance in the previous year will have caused an apparent under-spend in the current year which gets cancelled out by the corresponding payment in advance at the end of the current year. Any minor differences due to inflation will not distort either this year's or next year's accounts to the point of making them unrepresentative or misleading (ie: they are “immaterial”, in accountancy jargon) and can therefore be ignored.

So the rent is just entered into the spreadsheet on the day that it is paid and accounted for in that year, the counter-balancing transaction in the previous year having been entered similarly. The same will be repeated in subsequent years. Where, occasionally, there is a significant changes in the rent (eg: your charity takes on additional accommodation) which is not immaterial, this will generally have been known well in advance and can be dealt with in a note to the accounts.

The same considerations apply to regular payments which apply to periods which cover more than one financial year.

For example: Your Trustees' Indemnity Policy premium gets paid in October and runs for 12 months. So ¼ of the premium covers the period Oct-Dec in the current year and the remaining ¾ is an advance payment for the period Jan-Sep in the following year. As the premium is essentially consistent from year to year so that the payment in advance in one year is offset by payments in advance in the previous and following year, any increase in the premium due to inflation can be ignored as immaterial.

Page 42 of 48


9.5. Example 5: Ad Hoc Receipts in Advance

A common problem with membership charities occurs when members' annual subscriptions are due at the beginning of the financial year and some members pay their subscriptions in advance (ie: towards the end of the previous financial year). If the same members always pay their subscriptions in advance so that the total amounts do not vary much from year to year then the impact on the charity's accounts is self-compensating from year to year and can be disregarded. But by far the simplest way to deal with this (and similar) situations is tomove the due date for membership subscriptions back from the beginning of the financial year (eg: to the beginning of the second month) and to “vigorously encourage” members NOT to pay their subscriptions earlier than that.

But such an approach is not always possible, eg: where the charity wants to sell tickets in thecurrent financial year for a one-off (ie: not expected to occur annually) event which will not happen until the following financial year.

The first step is to consult with your Independent Examiner for his/her views on how this should be dealt with. At the end of the day the IE has to sign off that he/she is satisfied that whatever has been done is consistent with the relevant regulations and guidance.

One possible solution that works easily within the Simple Accounts Spreadsheet format is to create a category U-AdvanceReceipts and initially allocate the advance ticket sales receipts to that. That avoids having to record the advance payments along with the receipts for otherin-year activities thereby distorting the cash-flow pattern and making it more difficult to identify the total receipts for ticket sales for the event when it actually occurs in the following year. Setting up a category to keep the advance receipts separately identified enables themto be carried forward to the following year and to be reported in the notes to the Annual Accounts as “Liabilities – Receipts in Advance” (they are a “liability” because until the event has actually occurred the money, technically, still belongs to the payer and so would have to be refunded if the event were cancelled).

Then, in the following year's accounts an internal transaction is made from the brought forward U-AdvanceReceipts category to the appropriate activity income category so that the payments in advance can then be picked up, analysed and managed in the usual way. Notethat, because this is a self-compensating internal transaction it has no net effect on the amount of money in the bank account.

9.6. Example 6: Ad hoc Payments in Advance

You charity wants to run a big charity activity at the end of January and has hired a venue for it. The venue requires a 25% deposit in advance – so that has to be paid in the current financial year though the event will be held in the following year. As the venue hire - and therefore the deposit - is a significant amount of money, you really want the deposit to be

Page 43 of 48


included in next year's accounts alongside the balance of the venue hire so that the true (ie:full) cost of the activity can be accounted for in the financial year that the event occurred.

This situation is similar to the previous example and you should consult your Independent Examiner on how it should be treated.

One possibility is to allocate the 25% deposit payment to category U-AdvancePayments in the current year and report it in the notes to the accounts as “Other monetary assets – payments made in advance”. The funds in U-Prepayments then get carried forward into the following year when a self-compensating (ie: no change to the amount in the bank account) internal transfer is made between the U-AdvancePayments and relevant “CharitableActivties”categories – effectively the cost of the deposit on the venue is then charged to the CharitableActivities category and paid for from the notional monetary asset held in U-PrePayments brought forward from the previous year.

10. End-of-Year Operations

10.1. Create New Spreadsheet for New Financial Year

a) Open the End-of-Year Spreadsheet for the financial year just completed;

b) Make at least one, and preferably two (or more) backup copies;

c) Save a copy of the Spreadsheet for the coming financial year with a new name.

d) The remaining instructions in this section apply to the new spreadsheet for the coming financial year leaving the spreadsheet(s) for the previous financial year unaltered.

10.2. Delete Reconciled Transactions

a) Move to the Bank transactions worksheet and makea note of the end-of-year Transaction Balance,Reconciled Balance and Unreconciled Transaction incells J2, K2 & L2 respectively;

b) Delete all of Last Year's Reconciled Transactions:Click on the filter drop-down button for the R'dColumn-GScroll down and uncheck the (Blanks) boxClick [OK]

This selects just the transactions which have beenreconciled with the bank statement;

c) Click on the range-name box at the top-left corner ofthe menu bars, scroll down the drop-down list andclick on “BankTrans” to select all the Banktransactions data cells (Bank!A4:G2000);

Page 44 of 48


You'll see that the unreconciled transactions at rows 61, 71, 85, 122, 139 & 145-7 are hidden (see also section 6.5 Filtering Unreconciled Transactions).

d) Press the keyboard [Delete] key to delete all these reconciled transactions.DON’T WORRY ! – only the filtered transactions will be deleted. When you remove the filter all the hidden unreconciled transactions will be found to have been retained intact.

e) Clear the filter as described in section 6.3 Removing Filtering.;This will display all the rows in the worksheet, most of which will now be empty, leaving just the unreconciled transactions.The #VALUE which appears in Column-H (only in MS-Excel, NOT in OpenOffice Calc) is a consequence of earlier cells being blank and will disappear when the transactions are re-sorted as follows;

f) Sort the remaining unreconciled transactions into date-order as described in section 5.7 Sorting Transactions. This will sort all the remaining unreconciled transactions to the top of the worksheet in date order.

10.3. Re-set the End of the Financial Year

a) On the Introduction worksheet, update cell A11 (FYEDate) to the new financial year end (as at Section ii) and re-save the spreadsheet

10.4. Update Unreconciled Transactions to New Financial Year

a) As the unreconciled transactions have been accounted for in the previous year their Category must be changed to avoid them being counted again in the current year;For the first unreconciled transaction, click on the drop-down button of the

Page 45 of 48


Category cell (column-C), scroll to the bottom of the list and click on “O-PFY Unreconciled” to update the Category.

b) Repeat the operation for all the other unreconciled transactions.

Alternatively you can use “Click & Drag” to copy to Category from the first transaction into all the others. But Note: This is one of the rare occasions when itis practical, and permissible, to use “Click & Drag” within the transactions worksheets.

10.5. Update Balances

a) Enter into the new year's Brought Forward Transactions Balance, cell H3, the RECONCILED Balance from cell K2 of the previous year (as noted in step 10.2.a above) – ie: the reconciled balance as in theend-of-year bank statement.Note: NOT the transactions balance from cellJ2

b) The opening Transactions Balance (cell J2);Reconciled Balance (cell K2) and UnreconciledTransactions (cell L2) update automatically to be the figures bought forward from the previous year.

10.6. Bring Forward Any Payments/Receipts in Advance

If you entered any Payments or Receipts in Advance in the previous year (see sections9.5 Example 5: Ad Hoc Receipts in Advance & 9.6 Example 6: Ad hoc Payments in Advance) they can be brought forward and entered here.

Page 46 of 48


Note that the value of the transaction is first reversed – eg: the £500 advance payment to Friends House on 19-Nov-15 is entered as if it was a receipt (at row 12) – effectively paying the money back into the account It is then re-entered as a payment on 01-Jan-16 (at row 14), this time allocating the payment amount to the appropriate expenditure category, P2-Networking. Similarly the £360 of registrations in advance for the Feb. Conference are first entered as a payment on 20-Dec-15 and then re-entered as a receipt on 01-Jan-16.

This replicates, albeit in a somewhat clumsy manner, “double-entry” book-keeping in which every transaction to one category is counter-balanced by an “opposite” transaction to another. The effect in this case is to transfer the money from the “payment/receipt in advance” categories to the appropriate activity category. There is, of course, no net change in the bank balance itself.

And because these transactions never appear in the bank statement they are “reconciled” byentering an “A” in the R'd column-G to ensure that they do not subsequently appear as unreconciled transactions.

10.7. Update the Categories Worksheet

a) The column headings for the Monthly Budget (cells H2:S2) will have been updatedautomatically when the Financial Year End was updated at stepError: Reference source not found;.However, note that, initially, cells B2 & F2 will continue to display the date of the last Budget Report of the previous financial year.This will be corrected as soon as a date for a Budget Report for the current year is selected in the Budget Report Worksheet.No attempt should be made to alter either of those values/formulae directly.

b) Update the Budget figures, columns D & H:S, for the new financial year, as described in Sections Error: Reference source not found Error: Reference source not found & Error: Reference source not found Error: Reference source not found

Page 47 of 48


10.8. Update the Budget Report

a) Move to the Budget Report Worksheet;

b) Manually update the data in column B, the out-turn figures for each category for the previous financial year, to the values from the previous year’s financial report.Note: that only the out-turn figures for the individual categories need to be entered,the aggregates for groups of categories are calculated by formulae (ie: if the cell contains a formula, rather than a number, don’t change it);

c) The data in all other cells, columns D:I, in the worksheet are picked up from the Budget figures in the Categories worksheet and should not be altered.

10.9. End of Update to New Financial YearThis completes the end-of-year update of the spreadsheet for the new financial year which should be saved for future use, as normal.

Page 48 of 48

Date post:	13-Jul-2020
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

A Simple Accounts Spreadsheet for Small Charities ...Simple Accounts Spreadsheet for Small Charities...

Documents