Some common terms in financial management.
Accruals basis
An accounting procedure which relates all income and expenditure to the financial period to which it applies.
Assets
Money, goods and property which an organisation possesses.
Bank reconciliation
A procedure used to check the accuracy of your bookkeeping – and also to identify errors made by your bank.
Capital costs
Money spent on buying fixed assets such as office furniture or computers.
Capital grant
Money given specifically to buy fixed assets.
Creditors
People, companies or other organisations that are owed money by your organisation.
Debtors
People, companies or other organisations that owe money to your organisation.
Depreciation
A method of spreading the cost of a piece of equipment over the length of its useful life.
Designated funds
Unrestricted funds which have been allocated for a particular use by the management committee.
Endowment funds
Sometimes known as ‘capital funds’ this is a special types of restricted fund. The income from the capital can be used, but the trustees have no power to convert the capital into income.
Fixed assets
Items of significant value with a useful life of more than one year. For example, office equipment, land and buildings and motor vehicles.
General funds
Unrestricted funds which have not yet been allocated for a particular use by the management committee.
Liabilities
Amounts owed by the organisation on the date of the balance sheet.
Restricted funds
Funds received by the organisation for a specific purpose, stated by the donor, which cannot be used for any other purpose.
SORP
Statement Of Recommended Practice on Accounting and Reporting by Charities, approved by the Charity Commissioners for England and Wales. A charity does not have to follow the SORP by law, but will find it difficult to convince the Charity Commissioners that its accounts comply with the Accounting regulations if it does not.
Statement of assets and liabilities
A summary required for organisations preparing receipts and payments accounts. It is not the same as a balance sheet since non-monetary assets do not have to be valued.
Unrestricted funds
Funds held for the general purposes of the organisation, to be spent within the stated objects.
This page is a summary of information contained in the full online toolkit.
