How much charity-specific accounting knowledge do treasurers really need?

That is one of the themes explored by Elaine Alsop, co-author of the forthcoming seventh edition of the Charity Treasurer’s Handbook. The new edition reflects the introduction of the Charities SORP 2026 and is designed for the wide range of people who take on charity finance roles, from hands-on treasurers managing the books themselves to finance trustees overseeing an accountant or bookkeeper.

The charity treasurer office is not a single, standardised role. In smaller charities, the treasurer may be deeply involved in day-to-day bookkeeping and financial management. In larger organisations, the role is more likely to be strategic and focused on oversight. Some treasurers are accountants by profession; others bring financial skills from outside accountancy.

For Alsop, however, an effective treasurer needs to be able to understand the detail and, crucially, communicate it to the rest of the board in a way that supports decision making. They need to appreciate the technical accounting treatment and its implications for record keeping, ensure that strong financial controls are in place, and demonstrate why those controls matter. They also need to ensure restricted funds are accounted for correctly and have a good working relationship with finance staff, understanding the distinction between the treasurer’s governance role and the finance team’s operational responsibilities.

For ICAEW members who are new to charity finance, Alsop’s advice is not necessarily to start with the SORP itself, but instead to familiarise yourself with fund accounting. The distinction between restricted, designated and unrestricted funds – how they should be accounted for and how they relate to charity reserves – is fundamental to understanding charity accounts. It is an area where professional accountants moving into the sector may need to adjust their thinking.

Another important question is whether a charity is eligible to prepare receipts and payments accounts rather than accounts prepared on the accruals basis. This is particularly relevant following the doubling of the threshold for non-company charities in England and Wales to £500,000. The seventh edition of the Handbook includes a dedicated chapter on the cash-based approach.

For those working with accruals accounts under the Charities SORP 2026, some of the underlying accounting requirements will be familiar to accountants from their work with FRS 102. But applying those requirements in a charity context can be less familiar. For example, a lease may have a donation element, while different income streams need to be assessed to establish whether they arise from exchange or non-exchange transactions. Charity-specific issues such as donated services and legacies can also require a different perspective.

The new edition therefore aims to provide both accessible guidance and the technical detail needed by qualified accountants who are new to charity finance.

The treasurer’s role is not simply to ensure that the accounts are technically correct. Financial information needs to tell the story of what the charity is doing and the impact it is achieving.

Alsop argues that the numbers in the trustees’ annual report should support its narrative, showing how the charity has used its resources to deliver its outputs and impact. But the connection should also feature in regular board discussions. One practical approach is to bring information about what the charity has delivered alongside the finance report. This helps trustees understand the resources required to provide services or carry out activities and can reveal the full cost of the charity’s work – information that can subsequently inform funding applications and fundraising appeals.

Treasurers are operating in a challenging environment. Regulation continues to evolve, funding is under pressure, and demand for many charities’ services is increasing, but technology can help. Charity-specific or adaptable accounting software, fundraising platforms and tools supporting Gift Aid claims can make processes more efficient. AI built into finance software can also speed up processing and help turn financial data into more accessible board reports.

However, Alsop emphasises the need for human oversight. Transactions still need to be checked, particularly where costs such as salaries need to be allocated across different funds. AI-generated reports also need to be sense-checked, with appropriate consideration given to data sharing. The same caution applies when AI is used for funding applications or communications: accuracy and the charity’s own voice remain important.

An accountant may find themselves the only finance professional around the board table, with other trustees relying heavily on their expertise. The challenge is to use that expertise without taking decisions alone. Finance is a collective trustee responsibility, and an effective treasurer helps other trustees understand the financial position well enough to remain engaged, ask questions and contribute to decisions.

There is a strong demand for finance expertise at charity board level, and plenty of guidance available through ICAEW, regulators and third-sector organisations, as well as the Charity Treasurer’s Handbook. But new treasurers should also learn from the charity itself: its staff, volunteers and fellow trustees. Reading the latest accounts, making the most of an induction and asking questions can be just as important as understanding the accounting framework.

The combination of charity-specific technical knowledge, sound financial oversight, and the ability to bring other trustees with you is what makes the charity treasurer role such a rewarding office to hold.

These free resources can support you on charity-specific accounting requirements:

• Our Trustee Training Modules include a module on trustees’ financial responsibilities and are free to everyone, including non-members.
• The Community’s resources section includes a host of resources and helpsheets relating to accounting and reporting.
• Our Charities SORP 2026 hub includes resources and several free webinar recordings that cover key areas of change in the new SORP, and a webinar on Receipts & Payments accounting.
• Our Technical Advisory Service can help ICAEW members with their technical and ethical enquiries.