Struggling with SORP compliance? Automate Compliance to Access the Data you Need with Invoice Automation

We all agree that accounting and managing finances can be a headache. It’s the beating heart of any business but can lead to time and effort being wasted at no fault of the team involved. This is especially true for charities. Charities are subject to stricter financial reporting regulations than most to ensure full accountability and visibility when dealing with income and expenditure. While performing such important work, the last thing on your mind should be accounting compliance. However, charities are required to adhere to Financial Reporting Standard (FRS102), and a Statement of Recommended Practice (SORP) was released to aid charities in this. Though a good thing, SORP FRS102 further complicates SORP compliance as it enforces tight requirements, which can be difficult for a busy organisation. But what exactly are FRS102 and SORP?

Unlocking the Power of Compliance Automation Tools

Firstly, FRS102 is a SORP compliance standard which was created and implemented across Ireland and the UK in 2015 so it has been in effect for some time, but a refresher is always a good thing. It was brought about to consolidate financial reporting criterion and guidelines into a single standard so financial reporting information could be easily found. This applies to SMEs who are not required to adhere to IFRS, RFS101, or RFS105. Utilising compliance automation tools allows businesses to which it applies should review the new version to ensure there isn’t an accidental breach. SORP are a set of guidelines which interpret FRS and generally accepted accounting practices (GAAP) so you can confirm your financial accounts and reporting conforms to the right standards. It is overseen by 17 members each from a charity law jurisdiction covered by GAAP and updated when/after the FRS102 is. Though not a requirement, it is a useful tool that should be utilised by companies. But it brings about challenges for charities, including:

Secure Invoicing in Director Reports

Directors’/Trustees’ reports, which are a type of business report which includes in-depth detail regarding the charity’s activities and financial situation. For example, one must describe how it benefits the public, the risks facing them and how these are mediated, funds held as custodian trustee, and any renumeration paid even if zero. Secure invoicing is a critical aspect here, ensuring data integrity and confidentiality.

Why Automate Compliance?

Rather than an income statement, a Statement of Financial Activities (SOFA) is required. This is more detailed. It puts the income and expenditure for every activity on display. It does so by providing an analysis of income from key streams, trading and charitable activities, donations, and legacies. Secure invoicing systems can assist in the detailed reporting of such activities. In addition to this, it shows the money spent on investing, trading, and activities performed by the charity. Automate compliance solutions can streamline these complex processes for you.

Navigating Financial Requirements with Compliance Automation

A cash flow split into three headings (operating, investing, financing) being required for organisations with an annual revenue of over €500,000, a change in the way errors are corrected, and the treatment of investment property and financial instruments can be more manageable using compliance automation tools.

Achieving Efficient Operations

Dealing with donations, organising fund-raisers, helping your charity help others is hard enough without the added pressure of having to comply with a variety of finance reporting standards and regulations. Having to keep an accurate, up-to-date account of all income and expenditures is a laborious task. Invoices can be easily misplaced, data inputted incorrectly, or duplicates waste your accounting staffs’ time and energy, among many other potential pitfalls. Automate compliance can help you ensure your charity is adhering to all the financial regulations under SORP RFS102 and do it efficiently so that you can better focus on benefitting your cause.

Streamlining Process with AP Automation

Utilising a more stream-lined and accurate accounting process for SORP FRS102 is essential. Automate compliance with Accounts Payable Invoice Automation (APIA) solutions and compliance automation tools is proving beneficial for charities time and time again. Many charities have already made the switch and are benefitting from it. For example, Mencap, CareChoice Group Ireland, and Pancreatic Cancer UK who reported “an immediate and significant impact,” use Kefron AP.

Contact Kefron today for a free consultation.