Accounting and Reporting

As charities we are expected to report clearly and fully on the money we receive and spend. The Charity Commission has clear rules on how charities should account for their finances, and for reporting on them. As charities, PCCs must to comply with this guidance.

Two different methods of accounting are permissible, depending on the gross income of the PCC (For a definition of gross income, and about other requirements that are linked to the income of your PCC, see our page on thresholds).  As well as the guidance on this site, ‘PCC Accountability: The Charities Act 2011 and the PCC’ is a guide containing the advice on how these legal obligations apply to parishes. The 5th edition is available as both a book and online on the Church of England website.

Fund Accounting

PCCs as charities are required to follow the principles of fund accounting to track sources of income so they are used for the purposes for which they are intended. This is crucial for ensuring transparency and accountability. The animation below provides a brief overview and introduces some of the funds a PCC might have.

Receipts and Payments Accounts

If the gross Income of your PCC is less than £250,000 per year, you can choose to prepare your accounts on a ‘receipts and payments” basis. This is a simpler form of accounting which records money moving in and out of the PCC’s bank accounts during the financial year.

Accruals Accounts

Parishes with gross a income greater than £250,000 per year, must produce accounts on the “accruals” basis, which provides a more accurate view of the PCC’s financial position. Smaller parishes may choose this option, usually where the treasurer has a broader knowledge of accounting practice. For accruals accounts, all financially valuable resources and their movements are shown. These accounts include a value for fixed assets such as buildings; vehicles etc and these assets are reduced in value as they depreciate or else are re-valued annually.

Producing the Trustees Annual Report

With each year’s accounts, you must present a Trustees’ annual report. This will usually be led by the PCC Secretary and/or the Incumbent. The Charity Commission has rules on what must be covered.

External Scrutiny

Your accounts will need to receive external scrutiny. Most PCCs should be independently examined, although the largest PCCs will require a full audit.

We offer guidance on how to decide which level of scrutiny your accounts require, and guidance on how to work with an independent examiner.

Accounting software

There are various software products available that PCCs can opt to use to support them with managing finances.

MyFundAccounting is online accounting software specially designed for church treasurers. Record all your accounting transactions and funds; submit Parish Returns at the push of a button; produce a range of church and charity specific reports such as the trustees’ annual report; as well as print or email invoices.

MyGiving is a donations management system designed to work with the Parish Giving Scheme and Give A Little to support parishes with submitting both Gift Aid and GADS claims directly to HMRC.

Church of England parishes are eligible for the discounted rate of £10 per month for both programs (usual cost of £15 per month each), as well as access to their full range of training videos and technical support (usual cost of £150).

A free 30 day no obligation trial is available before opting to continue at the exclusive discounted rate.

Related pages

Receipts and payment accounts

Accrual accounts

The Annual Report

Registration with the Charity Commission

Independent Examination

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