Lessons · Accounting · who reads these accounts, and what they want to know
Who reads these accounts, and what they want to know
The readers are funders, regulators, taxpayers, trustees and the public, and they are not asking whether the organisation was profitable. They are asking whether money went where it was supposed to go, whether spending stayed inside what was authorised, and whether the organisation can continue doing what it exists to do.
Hone is a place to practise a career, one idea a day. This is one of its lessons, written out in full and free to read without an account.
In beta. This lesson was written for Hone and has not yet been checked by a qualified accountant. Practice material, not professional advice. What that means.
What it is for
Knowing the reader changes what belongs in a report. A commercial pack leads with the bottom line; these accounts lead with whether each restricted fund was spent on its purpose and whether the budget was respected, because those are the questions being asked and they are answerable.
How to think about it
Write for the question. Show each fund's movement and closing balance, show budget against spending as authority against use, and be explicit about what is restricted rather than leaving it in a note nobody reaches.
Worked example
A funderWas our grant spent on what we funded.
A regulator or an auditorWere the restrictions and the limits respected.
A trustee or a councillorCan we keep doing this, and what did we commit to.
None of them asked about profitWhich is why the report is not built around it.
Your turn
Name the question these readers are asking instead of whether there was a profit.
They want to know whether the money went where it was to go
Solve one, graded on the server
The trap
Presenting these accounts in a commercial format because it looks more professional. It buries the restricted position in the notes and leads with a number nobody asked for, and the reader has to reconstruct what they came for.