Treasurers Guide Part 2

Receipts

All the money received by your organisation must be recorded, no matter how small. Accountability is all important. If someone gives you £1 for the cause, write it down in your cashbook or accounting system.

Use as many accounts in your accounting system as you think fit to record receipts. Attention to detail early on will prove invaluable as a management tool later. For example, if you advertise and also attract income by direct mail, creating an account for each category will show which source of income is more efficient, and which one needs improvement.

Set up accounts that inform decisions

You can group your accounts under general headings. An example set of account groups and accounts could include. Simple account code numbers have been used in the following examples (if you have access to an accountant, they will most likely tell you the code numbers to use to suit their system):

• donations
  • 1. from individuals
  • 2. from business
• subscriptions
  • 3. annual
  • 4. lifetime
• merchandise
  • 5. direct mail
  • 6. charity shops
• others
  • 7. refunds
  • 8. grants

Build on this with any sources that are meaningful for you, for example events, online platforms, or corporate matching. Keep the structure simple enough to use, but detailed enough to answer common questions from the committee.

What to record for every receipt

Always include the name of the person or organisation which gave you money, as well as the date. It is also useful to note whether it was in the form of a cheque or cash, or other source, for example a direct transfer. Add a few more items to strengthen your audit trail:

• Amount, including currency if not GBP
• Payment method, cash, cheque, bank transfer, card, online platform
• Reference, receipt number, cheque number, or transaction ID
• Purpose or campaign, for example general fund, winter appeal
• Restriction status, unrestricted or restricted to a project or grant
• Event or class tag, if connected to a specific event

Expanded examples of receipt accounts

These sample accounts show useful distinctions without overcomplicating things.

Code	Group	Account	Notes
1010	Donations	Individuals, general	Unrestricted gifts from people
1020	Donations	Corporate donations	Company gifts, not grants
1030	Donations	Gift Aid recoverable	Record claims and receipts separately
1110	Subscriptions	Membership, annual	Track membership numbers alongside
1210	Merchandise	Shop sales	Record gross sales, fees and costs elsewhere
1220	Merchandise	Direct mail sales	Useful for campaign comparisons
1310	Events	Event ticket income	Tag by event name or code
1410	Online	Online donations, gross	Record platform fees as an expense
1510	Grants	Restricted grants	Include grant ID and reporting dates
1610	Other	Refunds received	Supplier credits or returns

Example, measure what works

Say you spend £500 on direct mail and £500 on local ads. Direct mail brings in £1,200, ads bring in £700. By recording each stream separately, you can see direct mail raised £2.40 per £1 spent, the ads raised £1.40 per £1. Next time, you might shift budget toward direct mail, or improve the ad content.

Handling cash, cheques, and online receipts

Match your documentation to the type of receipt. Consistency protects you and speeds up audits.

Receipt type	What to keep	Control tip
Cash, collection tin	Count sheet signed by two people, deposit slip	Two people count, bank within two working days
Cheque	Copy of cheque or stub, bank paying-in slip	Restrictive endorsement, for deposit only
Bank transfer	Bank statement entry, donor email or note	Use a unique reference donors can quote
Card reader at event	Z-read or end-of-day report, merchant statement	Reconcile daily report to bank settlement
Online platform	Payout report, fee summary, donor list if available	Record gross donation and fees separately

Special cases to note

• Restricted funds, mark any grant or donation that must be spent on a specific project, keep a simple running balance
• Gifts in kind, record a brief description and fair value if material, for example donated raffle prizes
• Refunds and chargebacks, record against the original income stream so results are not overstated
• Foreign currency, record the amount received in GBP on the day, note any bank conversion fees
• Gift Aid, collect declarations, track claims and receipts in a separate account so you can reconcile to HMRC

Payments

All payments must be written down, even if it was for a pint of milk. If you fail to write everything down, not only will your petty cash be short, others may wonder if anything else is amiss regarding your bookkeeping. It is for this reason that a receipt must be produced before you allow any money to be paid.

If someone buys a small item and forgets to get a receipt, a petty cash slip is fine, provided their name is written on it and they sign it. Keep a simple numbering system for slips and attach any supporting notes or photos if needed.

Keep your payment accounts simple and relevant

Use as many accounts as you like to record payments, but keep in mind the maxim, simplest is best. Postage is a good example. You may be tempted to break down the costs into recorded, registered, first class stamps, and so on. Unless this level of detail helps you manage something, for example measuring if a first class mail shot worked better than a second class one, do not do it, it only adds work for you and the auditor.

Tailor your payment groups to your organisation. If you have a permanent office, keep office costs together so the committee can see whether the office is paying for itself. If your organisation holds regular events, tag which payments belong to which event so you can later decide which events prove the most lucrative.

Required documentation for payments

Payment type	Documents to keep	Approval
Supplier invoice	Original invoice, purchase order if used, proof of delivery	Signature or email approval per spending limit
Employee or volunteer expense	Expense claim form, itemised receipts, mileage log	Manager approval before reimbursement
Petty cash	Petty cash voucher, till receipt, signed by claimant	Countersign by treasurer or designated person
Grant or award payment	Agreement, schedule, bank proof	Committee or trustee approval
Card or online payment	Invoice or receipt, card statement reference	Pre-approval and monthly review

Petty cash, use the imprest method

Set a fixed float, for example £100. When you spend from the tin, complete a petty cash voucher for each item and keep the receipts. When the cash runs low, add up the vouchers and reimburse exactly that amount back to £100. The cash plus vouchers should always equal the float, this makes shortages obvious and keeps things tidy.

Event based cost tracking, a quick example

Tag event income and costs with the same event code, for example SPRING-FAIR. If the Spring Fair brings in £2,400 in ticket sales and stalls, and the tagged costs total £1,100 for venue, insurance, and materials, your net surplus is £1,300. A simple report by event code lets you compare this year to last year and decide which activities to repeat.

Approval and control tips

• Set clear spending limits, for example under £200 requires one approver, over £200 requires two
• Separate duties where possible, one person approves, another pays, a third reconciles the bank
• Use pre-numbered invoices and vouchers, file in date order to keep a clean audit trail
• Avoid cash advances, use petty cash or reimburse promptly with receipts instead
• Review regular suppliers yearly, check value for money on utilities, printing, and insurance

Common pitfalls to avoid

• Over-categorising, if you never use the detail to make a decision, do not track it
• Forgetting fees, record card and platform fees so income figures are not overstated
• Missing names or dates, incomplete entries make audits and grant reports difficult
• Not filing receipts promptly, scan or photograph if paper might be lost
• Mixing restricted and unrestricted funds, tag them clearly from day one

Quick templates you can copy

Receipt log, suggested columns

• Date, payer name, amount, method, reference, purpose or campaign
• Account code, event tag, restriction, notes

Payment log, suggested columns

• Date, payee name, amount, method, invoice or voucher number
• Account code, event tag, approval, notes

Keep to simple processes you can follow every time. Consistency beats perfection, and it will make your reporting and reconciling much easier in the next stage.

Treasurers Guide part 3 here…