Why Reserves Don’t Appear on the Face of Charity Accounts

Grab your copy of my book Charity Finance from A - ZCheck out ExpensePlus and sign up for a month's free trial and 10% off your first year's subscription, using my referral link http://expenseplus.co.uk/r/AI-BANCIn this episode, I respond to a question I hear often in boardrooms when presenting final accounts:“Why aren’t the reserves shown on the face of the accounts?”It’s a fair question, and a healthy one.But answering it requires translating between governance thinking and accounting structure, so that what I do - unpack 'reserves'.This episode is for trustees, chairs, treasurers, CEOs, and anyone responsible for financial oversight who wants to feel more confident reading charity accounts.KEY TAKEAWAYReserves are not a separate accounting line, they are part of unrestricted funds.Not all unrestricted funds are freely available; some may be designated or tied up in assets.The face of the accounts shows classification and not governance interpretation.Strong boards monitor reserves during the year, not just at year end.Questions Trustees Can Ask (about reserves)How many months of operating costs do those reserves cover?Are we meeting our reserves target? If not, what is the plan?What assumptions underpin our reserves policy?BEST MOMENTS“When trustees ask where the reserves are, it comes from responsibility.“If you want to understand reserves properly, look in three places.”“Reserves are not missing from your accounts, they’re embedded within them.”ABOUT YOUR HOSTAishat operates her own bookkeeping and accounting services practice –BAnC Services – which focuses primarily on serving non-profits. Before founding her practice, she dedicated over two decades to the non-profit sector.With her podcast, Aishat shares practical insights and expertise to streamline financial management for non-profits, while also shining a light on the often unseen and unheard efforts that uphold the delivery of a non-profit’s mission.She is the author of Charity Finance from A to Z“ – a practical guide designed to demystify finance for those working in the charity sector.Beyond her professional endeavours with non-profits, Aishat is deeply committed to supporting single mothers in navigating financial challenges and champions financial literacy among young Black adults. She thrives in conversations about money, empowerment, and purposeful work.Work with Aishat: www.bancservices.co.ukCONNECTInstagramTikTok