If you run a charity in New Zealand, 2016 will be a year of change. A new Financial Reporting framework has been introduced that impacts some 27,500 registered charities.
Because this is such a huge change for the not-for-profit sector, we wanted to highlight the benefits and opportunities this presents for your charity, funders and stakeholders.
Join our free webinar “NFP – Surviving the move to tiers 3 & 4“, with Barry Baker on Thursday 28th April at 10am to find out more.
New financial reporting standards are now in effect for over 27,000 registered New Zealand charities. As a registered charity, you must complete your annual reporting to Chairty Services. Until recently, there was no framework for your financial statements.
Profit is not the most important thing for many charities, so it can be tough to measure success. The new Statement of Service Performance lays out the objectives of the organisation and whether those objectives have been met. This provides a consistent and clear approach for all stakeholders and it also keeps the organisation on a clear path to their goals.
The key stakeholders for a charity will usually have limited visibility over the performance of the organisation. Often struggling with consistency of reporting, transparency, access and integrity. And those that govern the reports (DIA Charities Services) will receive a set of Financial Reports from all 27,000+ charities in all types of inconsistent formats from handwritten accounts, excel spreadsheets to computer generated reports. We want to make that consistent, and to an extent, automated.
Charities can ultimately benefit from the new framework
So while many people think this is extra compliance where it is not necessary, I believe the new reporting framework will help charities make better decisions, clarify objectives, and create better ways of measuring these objectives. All this has the ultimate benefit of providing a better service to those they’re trying to help. It will also mean that the charity’s stakeholders will have more transparency and higher integrity information, hopefully resulting in easier access to funding.
Xero set out to assist both the charities and the DIA Charities Services by providing simple, easy to use Tier 3 & 4 reports to our Xero advisors. These include a Statement of Service Performance, Statement of Cashflows & Statement of Accounting Policies in accordance with the appropriate tier.
We advise all charities to contact a Xero Certified Advisor to get assistance with their first year’s Financial Statements. Xero has taken the stress out of the new compliance requirements, and our Advisors are armed with the tools to produce compliant Tier 3 & 4 Reports. Speak to your Xero Certified Advisor or if you don’t already have an advisor, check out our Advisory Directory to find one today.