Articles

By Paul Foden, CEO of Aedon.Accounting

As CEO of Aedon.Accounting, I’ve seen firsthand the challenges charities face when trying to comply with the Charity Statement of Recommended Practice (SORP). These guidelines are essential for charity accounting, but they often leave trustees and finance managers feeling overwhelmed.

Our latest whitepaper, Designing a Multi-Dimensional Chart of Accounts for the Charity SORP, tackles these issues head-on. I was initially asked by a client to create a SORP-compliant Chart of Accounts (COA), and what seemed like a simple task quickly became a complex process. This revealed just how difficult it can be to interpret the SORP, even for seasoned accountants. Many charity finance teams face similar frustrations, as the intricacies of SORP requirements aren’t always fully understood.

One of the key concepts within SORP is Fund Accounting, where all income is allocated to specific funds—whether restricted or unrestricted—and tracked across various activities. Unfortunately, basic financial systems struggle with this level of complexity. Producing essential reports like the Statement of Financial Affairs (SoFA) and Balance Sheet can become a time-consuming and costly exercise, often requiring the help of external accountants.

The good news is that adopting a multi-dimensional financial system can make all the difference. By tagging each transaction with both a fund and an activity dimension, charities can streamline reporting, reduce errors, and save valuable time. In the whitepaper, we explain how this approach allows for the automatic generation of key SORP reports—something no basic financial package can offer.

At Aedon.Accounting, we’ve developed Aedon.Charities to address these exact needs, making it easier for charities to stay compliant and efficient. The whitepaper also includes practical examples, a sample Chart of Accounts, and clear guidance on applying multi-dimensional accounting for charities of all sizes.

If your charity is finding SORP compliance difficult or you’re looking to simplify your financial management, download our whitepaper today. It offers the insights and tools to help you streamline your systems and meet SORP requirements with ease.