Key takeaways
What this article covers, in order:
- The volunteer treasurer's problem
- Restricted, unrestricted and the rest
- How to track funds when there's one bank account
- A worked fund summary
- Donations, cash and subs: the practical bits
- A treasurer's monthly routine
For a small charity or club, the bank balance isn't one pot of money. Some of it was given for a specific purpose and can only be spent on that, which is what "restricted funds" means. Good bookkeeping for charities UK treasurers can follow keeps restricted and unrestricted money apart in the records, even when it all sits in one bank account, so you can show any funder exactly where their money went.
The volunteer treasurer's problem
Jo became treasurer of a youth football club in Derby at the AGM, mostly because nobody else put their hand up. She inherited a bank account, a carrier bag of receipts and a spreadsheet the last treasurer had stopped updating months ago.
Then a local trust gave the club £3,000.00 for new goalposts. The trust wants a short report showing how it was spent. And the committee wants to know whether they can afford new kit.
Both questions have the same answer: it depends on how much of the bank balance is the trust's money. If Jo can't tell, she can't answer either of them.
Restricted, unrestricted and the rest
Here's the language, kept plain.
| Type of fund | What it means | Example |
|---|---|---|
| Unrestricted | Can be spent on anything within the organisation's purposes | Membership subs, general donations, bucket collections |
| Designated | Unrestricted money the committee has chosen to set aside | "£500 for next season's tournament" |
| Restricted | Given for a specific purpose, and can only be used for it | A grant for goalposts, an appeal for a new minibus |
| Endowment | Capital that must be kept, often with only the income spendable | Rare for small clubs, more common in older charities |
The key difference: the committee can change its mind about designated funds. It can't change the terms of a restricted fund. If a donor or funder said "for goalposts", it's for goalposts.
How a donation becomes restricted matters too. If an appeal letter says "help us buy a minibus", money given in response is usually restricted to the minibus. Wording on appeals and grant letters is worth reading carefully. If you're unsure whether something is restricted, a charity accountant or independent examiner can advise, and it's better to ask before spending it.
How to track funds when there's one bank account
Most small groups have one current account and maybe a savings account. That's fine. Funds are tracked in the books, not by opening an account per fund.
The simplest workable approach:
- Use separate income categories for restricted money. For example "Grant income: goalposts (restricted)" alongside "Subscriptions" and "Donations".
- Use matching expense categories, or clear descriptions. "Equipment: goalposts (restricted)".
- Keep a fund summary, updated monthly, showing each fund's opening balance, income, spending and closing balance.
- Check the fund totals add up to your money. Total of all funds should equal your bank balances, plus money owed to you, less money you owe.
Step four is the one people skip, and it's the one that catches mistakes.
A worked fund summary
Here's Jo's club for last season, which ran from 1 Sep 2025 to 31 Aug 2026, looked at partway through, on 31 Jan 2026. There are no unpaid bills or money owed, so everything is in the bank.
| Unrestricted (£) | Restricted: goalposts (£) | Total (£) | |
|---|---|---|---|
| Opening balance 1 Sep 2025 | 1,850.00 | 0.00 | 1,850.00 |
| Subscriptions | 2,400.00 | 0.00 | 2,400.00 |
| Donations and bucket collections | 615.00 | 0.00 | 615.00 |
| Grant from local trust | 0.00 | 3,000.00 | 3,000.00 |
| Pitch hire | (1,920.00) | 0.00 | (1,920.00) |
| Kit and equipment | (310.00) | 0.00 | (310.00) |
| Goalposts | 0.00 | (2,640.00) | (2,640.00) |
| Closing balance 31 Jan 2026 | 2,635.00 | 360.00 | 2,995.00 |
Checking the columns:
- Unrestricted: £1,850.00 + £2,400.00 + £615.00 − £1,920.00 − £310.00 = £2,635.00
- Restricted: £3,000.00 − £2,640.00 = £360.00
- Total: £2,635.00 + £360.00 = £2,995.00
And the bank statement at 31 Jan 2026 says £2,995.00. The funds reconcile to the bank.
Now Jo can answer both questions. The trust's money: £2,640.00 spent on goalposts, £360.00 left, which the grant letter says can go on nets and pegs. The committee's question: there's £2,635.00 of unrestricted money, minus whatever's needed for the rest of the season's pitch hire. The bank balance of £2,995.00 alone would have overstated what's free to spend by £360.00.
Donations, cash and subs: the practical bits
Bucket collections and cash. Two people count, both sign a slip with the total, and the cash is banked whole. Don't pay expenses out of collection cash; it breaks the trail between what was collected and what was banked.
Subs paid by bank transfer. Ask members to use their name as the payment reference. It turns a guessing game into a quick match.
Online donation platforms. These often pay out net of fees. Record the gross donation and the fee separately, the same way a shop records card takings, so your donations figure is the true amount people gave.
Donations in kind. A parent donates a laptop. Record a note of it for your annual report, but it doesn't touch the bank, so it doesn't belong in your bank reconciliation.
Expenses claims. Volunteers who buy things for the club should claim with a receipt, and you pay them back by transfer. Avoid cash reimbursements from takings.
A treasurer's monthly routine
- [ ] Bank (and savings) reconciled to the statement
- [ ] Every income line categorised, restricted money in its own category
- [ ] Every expense with a receipt or claim form
- [ ] Fund summary updated
- [ ] Total of all funds equals bank balances (plus/minus anything owed)
- [ ] Any restricted fund with a deadline or reporting date noted
- [ ] Short report for the committee meeting
How HelloBooks helps
HelloBooks works well for a treasurer who wants proper records without an accounting background. Connect the club's bank through Open Banking (most UK banks and cards) or import a CSV statement, then confirm or change the category on each transaction in the review list. The reconcile screen lines the statement up against your books, suggests a match for each line with a confidence score and why it chose it, and leaves you with only the exceptions.
You can export a reconciliation report (opening balance, cleared items, outstanding items, closing balance) as PDF or CSV for the committee or your examiner, and lock a reconciled month once it's signed off, with any reopening logged. The Free plan is £0 with no card and no expiry, includes two users (handy for a treasurer and a chair) and up to 200 transactions per year. A busier club might need Pro (£14.99 a month) for unlimited users and roles. HelloBooks doesn't have a dedicated fund-accounting module, so restricted funds are tracked with categories and a fund summary as described above. Our bookkeeping features page and pricing have the details.
FAQs
Do we need a separate bank account for restricted money?
Not usually. Tracking funds in the books is enough for most small groups. A few funders ask for a separate account as a grant condition, so read the terms.
What if we spend restricted money on the wrong thing by mistake?
Fix it in the books by reclassifying the cost and, if needed, moving unrestricted money back into the fund. Then tell the funder if their terms require it. Honesty early beats a surprise at year end.
Can unrestricted money be moved into a restricted fund?
Yes, the committee can top up a restricted project from unrestricted money. The reverse isn't allowed without the donor's agreement.
How do I record a grant paid in instalments?
Record each instalment as restricted income when you're entitled to it, usually when it's received or confirmed in writing. Keep the grant letter with your records.
Who should check the treasurer's books?
Many clubs ask someone independent to look over the year-end figures. Clean monthly reconciliations make that review quick for whoever does it.
Keep the funds summary next to the bank reconciliation, and you'll always know which money is actually yours to spend.
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