Receipts and payments accounts are created using a simple form of accounting that summarises all monies received and paid via the bank and in cash by the charity during its financial year, along with a statement of balances.
The closing bank balance to report in the accounts should be:
· The balance at the bank on the last day of the financial year.
· Any money received before the end of the year but only banked in the following year.
· Any cheques written before the end of the year but not cleared through the bank until the following year.
The main differences between receipts and payments and fully accrued accounts are that:
Formal accounting standards are primarily concerned with ensuring that accounts show a true and fair view of a charity’s financial affairs do not apply to receipts and payments accounts.
However, the receipts and payments accounts must give sufficient detail to enable a reader to gain an appreciation of the transactions of the charity and of any surplus or deficit.
Can my charity prepare receipts and payments accounts?
Non-company charities with a gross income of less than £250,000 can prepare accounts on a receipts and payments basis unless:
requires the charity to prepare fully accrued accounts.
Charitable companies, registered social landlords, community benefit societies (CBS or Bencom) and further and higher education institutions cannot prepare accounts on a receipts and payments basis.