Choosing spending categories for a small charity

Fewer than you think

Eight or ten headings is plenty for a charity under £500k. Insurance, Utilities, Salaries and wages, Repairs and maintenance, Office and admin, Professional fees - that sort of thing.

A heading exists so that a trustee can look at a page and say "we spend too much on that". Thirty headings do not answer that question better than ten; they answer it worse.

Charitable spending or a running cost

A charity is judged on how much of its income reaches the people it helps. Each heading has a box called What the money is for: choose Charitable spending for grants you give, services you pay for and anything else that goes to your beneficiaries, and Running costs for insurance, fees and admin.

Once one heading is marked as charitable spending, Reports → Year on year shows the two apart, with your running costs as a percentage of your income, and the printed income and expenditure page groups them the same way. A heading you have not answered for is counted as a running cost.

It applies to every payment under the heading, including the ones already entered, so there is nothing to go back and re-enter.

Order, and retiring one

Order decides where a heading sits in your reports - lower numbers come first. Leave them all at nought and they sort by name.

When you stop using a heading, turn off Still in use rather than deleting it. Historic payments keep reading correctly, and the heading stops being offered on new entries and in the budget picker.

Renaming a heading rewrites how every past year reads, which is why it needs the same permission as entering a payment does.

More guides

• Before this: How to record charity income, grants and donations
• Next: How to set a charity budget for the year
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