Allocation of costs to accounts in Quickbooks
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Project costs
Direct costs associated with running a project. Can include salaries if it could be argued the member of staff would not be otherwise employed.
Support costs
Overheads. Office costs, support staff, general running costs
Governance costs
Costs of running the charity such as Independent Examiner fees, legal fees, etc.
Fundraising costs
Example - Fundraising costs should be re-defined to reflect the large amount of staff time spent in negotiations regarding funding. A large amount of staff time is spent in negotiating and applying for grants and contracts to fund charitable work, and this should be costed into the figures for fundraising expenditure.
Notes on allocation to projects
If you want to go down the allocation route (which larger charities have to), the SORP lays out how to do this:
- Allocate your direct costs to the appropriate project.
- Split your support costs between generic type (eg, premises, staff costs, office costs etc)
- Decide on a basis to split each type of support cost (floor area, staff time etc)
- Allocate the costs in this way to each project, including restricted funds.
The only thing you need to watch for is where you have received a restricted grant that does not allow you to claim for certain costs (eg. Big Lottery funding does not allow you to allocate employer pension contributions).
