Good financial record keeping is essential for well-run charities. It helps trustees understand their organisation’s financial position, make informed decisions and demonstrate that charitable funds are being managed properly.
A new report from OSCR, 'Learning from OSCR’s inquiries: Good financial record keeping for charities', highlights common issues that can arise when financial records are incomplete, inaccessible or not maintained appropriately.
Scottish charities have a legal responsibility to keep accurate accounting records. OSCR’s report highlights four key lessons:
- Keep records appropriate to your charity – systems should reflect the size and complexity of your organisation and its transactions.
- Keep records up to date – regular record keeping helps trustees understand the charity’s financial position and identify issues early.
- Don’t rely solely on accounting software – software is a useful tool, but trustees still need to understand how financial records are maintained and whether they provide the information the charity needs.
- Share financial responsibility – appropriate checks and oversight are important, and responsibility for a charity’s finances should not rest entirely with one person.
Good financial records aren't just about meeting legal requirements. They help trustees identify risks, oversee the use of charitable funds and make informed decisions about the organisation’s future.
OSCR’s report provides a useful opportunity for charities to review their current financial record-keeping arrangements and identify any areas that could be strengthened.
