How to Prepare a Charity for Year-End Financial Reporting
Practical Advice from an Experienced Bookkeeper
Year-end financial reporting can feel like a daunting task for many charities, especially smaller ones juggling operations with limited resources. But as a bookkeeper who has supported nonprofit organisations for years, I can assure you that with a clear process, the task becomes much more manageable.
Below is a practical guide to help your charity prepare for year-end financial reporting, step by step.
1. Reconcile All Accounts
Start by reconciling every financial account:
✔ Bank accounts
✔ Credit cards
✔ Petty cash
✔ Online platforms (e.g. PayPal, JustGiving, Stripe)
Ensure all transactions are accurately recorded and match the statements. If something doesn’t add up—investigate now, not later.
2. Review Income and Donations
Confirm all income is correctly entered and categorised:
- Donations (restricted and unrestricted)
- Grants
- Gift Aid
- Fundraising events
- Earned income (e.g. training, merchandise)
Don’t forget to link each entry to supporting documents or donor communication where relevant.
3. Double-Check Expenses and Receipts
Every expense must be:
- Logged and categorised
- Linked to a receipt or invoice
- Approved according to your policies
Look out for missing documents, misclassified costs, or duplicate entries. This will make reporting far easier—and more accurate.
4. Allocate Costs Clearly
Charities must often split costs between different areas:
- Charitable activities
- Governance
- Fundraising
Use a consistent method for cost allocation and document your rationale. This is critical for audit readiness and annual reports.
5. Check Fund Balances and Restrictions
Ensure you are correctly managing:
- Restricted funds – tracked separately and only used for specified purposes
- Unrestricted funds – general operational use
Misuse of restricted funding is a common compliance risk—make sure your records are clear and current.
6. Prepare Year-End Schedules
Create schedules for:
- Fixed assets and depreciation
- Prepayments and accruals
- Payroll and PAYE reports
- Outstanding Gift Aid claims
- Grant income vs. expenditure
These will support your financial statements and simplify audits or independent examinations.
7. Document Adjustments
If you make manual adjustments or journal entries at year-end, record:
- The reason for the change
- The date and amount
- Who approved it
This adds transparency and helps during audits or reviews.
8. Coordinate with Your Accountant or Examiner
If you’re working with an external accountant, reach out early. Provide:
- A clean trial balance
- Backup documentation
- Any additional info they might need
Ask if they have a year-end checklist you can follow.
9. Support the Trustees’ Report
While the Trustees’ Annual Report is narrative, your financial insights can add valuable context, such as:
- Key income trends
- Project outcomes
- Variances from prior years
- Financial challenges or successes
10. Back Everything Up
Before closing the year, back up:
- Digital and paper receipts
- Statements and reports
- Donation records
- Payroll files
Store them securely and ensure compliance with data protection laws.
Final Thoughts
Preparing year-end reports is more than just a compliance exercise—it’s an opportunity to demonstrate your charity’s professionalism, transparency, and financial health.
Keeping your books tidy throughout the year is the best way to make year-end simple. And if you’re feeling overwhelmed, don’t hesitate to bring in a professional bookkeeper or advisor. The peace of mind (and time saved) is worth it.
Need Help with Charity Bookkeeping?
We specialise in bookkeeping for charities and nonprofit organisations. Whether you need year-end support, help with fund tracking, or ongoing financial management, we’re here to help.
👉 Contact us today to schedule a free consultation.
