Accounting technology / Glossary / Charity accounting software

What is charity accounting software?

Definition

Charity accounting software keeps a charity's books with income and spending tagged to restricted and unrestricted funds, so the trustees can produce receipts and payments or accruals accounts under the Charities SORP. Some products also prepare Gift Aid schedules for HM Revenue and Customs and share reports with boards and funders.

Also calledfund accounting softwarenot-for-profit accounting software

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SORP 2026: Periods from 1 Jan 2026
Receipts and payments: Up to £500,000
Audit: Over £1.5m income

Charity accounting rules in 2026

SORP 2026 applies to reporting periods starting on or after 1 January 2026 and sorts charities into three tiers: income up to £500,000, £500,000 to £15 million, and over £15 million. In England and Wales, new Charity Commission thresholds apply to financial years ending on or after 30 September 2026. Unincorporated charities and CIOs with income of £500,000 or less can prepare receipts and payments accounts, up from £250,000; above that, accruals accounts are required. Independent examination is required above £40,000 of income, up from £25,000, and the examiner must be professionally qualified above £500,000. An audit is required above £1.5 million of income, or above £500,000 of income with assets over £5 million. Gift Aid adds 25p for every £1 donated; charities send it through Charities Online, with up to 1,000 donations on each spreadsheet, or through eligible commercial software. Xero gives registered not-for-profits 25% off a business plan, from £18 a month excluding VAT for Ignite. AccountsIQ tags transactions as restricted or unrestricted and by fund, with SORP reporting, from €275 a month for Core.

Common questions

What accounting software do charities use?+

General packages such as Xero, which gives registered not-for-profits 25% off, and fund accounting products such as AccountsIQ, which tags transactions by fund and produces SORP reports.

Can a charity use Xero?+

Yes. Xero gives registered not-for-profit organisations 25% off a business plan, applied once the charity number is confirmed within the 30-day trial or 31 days of subscribing.

When does a charity need an independent examination?+

For financial years ending on or after 30 September 2026, when income is over £40,000, up from £25,000. Above £500,000 the examiner must be professionally qualified.

How do charities get Gift Aid online?+

Through Charities Online, attaching a schedule spreadsheet of up to 1,000 donations, or through eligible commercial software. The charity must be recognised for tax purposes by HM Revenue and Customs.