SORP imposes new bookkeeping standards
The 2005 SORP is forcing charities to reassess their internal systems
The 2005 SORP applies to all accounting periods commencing on or after 1st April 2005.
The emphasis in the new SORP on activity accounting and the analysis that is required to give the information required by the SORP has imposed new burdens on charity bookkeepers.
If charities are to avoid significant increases in their accountancy fees next year, they must now be taking steps to ensure that their bookkkeeping systems are adequate to produce the analysis required from 1st April 2005.
Not only must there be analysis within the accounting records for each fund, but there must also be analysis by activity. This means that every item of expense will require a two way analysis, and this will require fairly careful thought by each charity in the context of its own funding and activity structures.
Software solutions, such as Sage accounting software, will help with this, but only if the nominal and departmental chart of accounts has been carefully designed.
Peter Brown & Co would be very pleased to help any charity assess its bookeeping arrangements. In our view, the longer such an assessment is delayed the greater will be the future problems, when accounts covering the current period come to be drawn up.