Do give this guide a try. Contact me with any queries, corrections, or comments.

(In particular if you think it would make a big difference to have videos for certain processes, then let me know which. I would not want to duplicate Xero training videos, though.)


Why offer a Xero guide for small charities?

One reason is the likelihood that users are not very familiar with accounting practices, let alone accounting software. There will often be a reliance on volunteers or staff without much accounting experience and quite often needing to cover a wide range of duties.

Secondly there is the particular need to account for project expenditure and identify revenue restricted to certain purposes. Preferably one wants to be able to track this without the complication and expense of the special projects accounting module.

Charities wanting to document processes for easier on boarding of staff or quality audits can use or adapt the guide for that purpose.

Why use Xero in a small charity?

The main alternatives are either use of spreadsheets, an external service, or competitor software to Xero. There may be different alternatives used, respectively, for financial information, wages processing, and pension administration.

The disadvantages of spreadsheets are:

  • Firstly it is most unlikely that both management and year end accounts can be more or less automatically produced from them. This implies work by someone to create the necessary reports, possibly by an external auditor or accountant, which implies significant cost.
  • Secondly they tend to be easily understood only by their author; hence there is a vulnerability to the continued presence of the author at the organisation as well as a need always to go through (and hence take the time of) the author in order to access financial information.

Using different solutions for accounting data, wages processing, and pension processing is more cumbersome than it need be and creates the need to integrate the information successfully and double check for potential errors.

Xero (or equivalents) overcomes these shortcomings by:

  • always having appropriate reports available based on current data
  • tax, national insurance contributions, and pension contributions, and related submissions are automatically done by the software
  • any registered user can access the data at any time
  • standard training (such as this guide) makes it easier for new staff to pick up where their predecessor left off.

In the case of Xero in particular, the customisation of reports addresses the desire not to present accounts or donor reports in terms of the profit and loss of a business but with terms more appropriate to the organisation.

About Me

My name is Andrew Carver and I am now retired from full-time employment. My Linked In profile shows some of what I have done.

I am active as the Treasurer Trustee of a local charity in Oxford, UK. This guidance is the product of work I did for them, first in helping select the right Cloud-based accounting package and second helping implement it.

It seemed a shame not to have that work available for others to share, especially since I found no pre-existing guide to the range of things small charities would encounter in implementing this kind of accounting system.


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