Setting up a new ExpensePlus account if a project/church plant within your existing charity becomes its own separate charity

This help guide article is you if your project or church plant is currently part of an existing charity but is registering to become its own charity.

You will learn about things you need to consider, and what is needed during the transition period when your new charity is being created.

Managing the new charity's accounts in the other charity

While your new project or church plant's accounts are still within the old charity, you should have a separate fund for all the income and expenditure of the new project or church plant.

Setting up your new project or church plant as its own charity

When your new project or church plant does become a separate legal entity, you will need to create your own financial accounts and set up your own bank account.

There will be a transition period. During this period:

• income and expenditure that relates to the new project or church plant but that goes through the old charity's bank accounts will form part of the old charity's accounts
• transactions that go through the new project's or church plant's bank account will form part of the new charity's accounts.

We recommend keeping the transition period as short as possible. You can facilitate this by:

• opening a new bank account for your new charity as soon as it is registered;
• register for Gift Aid for the new entity as soon as possible (as this application can take a while);
• move the bulk of your cash from the other charity to the new entity as soon as the new bank account is open;
• move over all outgoing standing orders and direct debits to your new bank account;
• move payment processor payouts to arrive into your new bank account;
• process all payments inside your new ExpensePlus account, making payments from your new bank account;
• be proactive with donors asking them to set up new standing orders with your new bank details, and asking them to complete new Gift Aid declarations;
• sort out the legal transfer of any assets.

Getting donors to transition is typically the most challenging of these steps, so it is important that you are proactive in encouraging this.

In reality, most organisations will still have a few donations coming into their old charity's bank account after several months.

Setting up a new ExpensePlus account

As soon as your new charity is set up, you should register for an ExpensePlus account. If you already use ExpensePlus for your other charity, this is not a problem - you can easily use ExpensePlus for multiple organisations. We'd recommend you use the same email address as your existing user account and include a note in your trial request.

• Setting up your new charity's account will be easy as your opening balances and bank account balances will all be zero.
• Donors will need to complete new Gift Aid declarations for your new charity.

When should I set up the new ExpensePlus account?

We recommend that you to set up the new ExpensePlus account for the new charity 3 to 4 weeks ahead of the date you are likely to get your charity registration through. This way, you can set up ExpensePlus and the treasurer can become familiar with it. As soon as the bank account is opened, you can start processing the transactions that are happening within that bank account through ExpensePlus.

Can I set up my new ExpensePlus now and run accounts in parallel?

We recommend that you wait until you nearly have your new charity registration through to set up your new ExpensePlus account and begin the transition period. This will help keep your transition period short and reduce duplication.

We do not recommend setting up a new ExpensePlus account earlier than one month before your charity registration is through for the following reasons:

1. Up until the point the new charity is set up and has a bank account in their name, all income and expenditure relating to the new project or church plant needs to be within the other charity's accounts. So if you had a new ExpensePlus account already, either (a) there won't be any data in it or (b) you are duplicating data in ExpensePlus (because the data has to be in the other charity's finances because it's part of their accounts).
2. Your new charity needs to start with opening balances of zero at the point the new charity is registered and their bank account is opened. So if you enter data in ExpensePlus that is prior to the date the charity is registered, then your opening balances at the point the charity becomes officially registered won't be zero which is a problem.

How to record money moved between the old charity and the new CIO bank account

Within ExpensePlus you will need to record the outgoing amounts from your other charity's bank account as expenditure and the income amounts into your new bank account as income.

At year-end, the person creating your accounts will need to correct for this and should ensure this money is shown as a transfer instead.

To enable the money transferred to be easily identified, and to avoid the skewing of income and expenditure, we would recommend that within your new ExpensePlus account you:

• create a fund called 'transfers' and an income category group and income category within this, also called transfers;
• record all transfers from your old charity bank account into this fund/category.

To allocate this money to the different funds it relates to, we'd recommend you use the fund-to-fund transfer feature to give each fund its correct balance.