COVID-19: Stewardship is operating as usual and we are aiming to provide as close to normal service as we can.
Please click here for regular updates

Receipts and payments accounts; you might want to give it another look

By Alan Hough | 17 July 2017

Receipts and Payments - a blog from Stewardship

Every year changes are required in the disclosure or format of accruals accounts in order to meet new regulations or to reflect changes in emphasis or best practice. However, as the full impact of the FRS 102 Charity SORP is felt for the first time, this reporting season has seen more changes than usual. For some of our own clients this has required minor changes, for others quite significant ones.

Contrary to the views of some church treasurers and trustees, for most churches the receipts and payments basis of accounting is perfectly acceptable and may save you a lot of stress and time. Here’s why…

  • They are generally simpler to produce;
  • They are generally easier for church members to understand with less accounting jargon used;
  • Cash is placed at the heart of the accounts; the most comprehensible number for most church members;
  • They are generally easier to independently examine and therefore less expensive;
  • They avoid some of the more problematical judgement and disclosure issues required by SORP compliant accruals accounts;
  • Trustees are not formally required to consider ‘going concern’; and
  • For English and Welsh charities the full detailed disclosure regarding trustee remuneration is not legally mandatory.

However, in making that choice you also need to be aware that:

  • Some commercial lenders and grant makers may require full accruals accounts;
  • Because items of a ‘capital’ nature are expensed, expenditure trends may appear to fluctuate from year-to-year; and
  • Changing from the accruals basis to the receipts and payments basis requires some accounting adjustments to take place in the first year to the prior year comparative figures.

Is it allowed for my church?

If your church is constituted as a company or has annual income in excess of £250,000, then you are not allowed to use the receipts and payments basis and can only use the accruals basis making sure that you adhere to all the rules set out in the FRS102 Charity SORP.

In conclusion we would stress that:

  • Receipts and payments are real accounts;
  • They are recognised by the Charity Commission;
  • They are often better understood by the average church member; and
  • They are generally easier to compile.

All in all, if you can make use of the receipts and payments basis then it is well worth exploring.


What you can and can't do with your charities money

Church finance - it's better as a team sport!


Briefing papers

Accounting packages for churches and small charities

Making sense of fund accounting


Posted by Alan Hough

Alan has an accounting background having worked in “the City” for more years than he cares to mention. He now works as an advisor and consultant to a number of Christian churches and charities seeking to help them better understand and embrace their finances.

On a good day, you might find him on out on his bike or at White Hart Lane cheering on his beloved Spurs.


There are currently no comments on this post

leave a comment:

Your comment will have to be approved by a site administrator before it is shown on the site so please be patient.