The side spreadsheet that never agrees with Xero
The trust funding your befriending service approved a budget with lines for staff time, volunteer expenses, venue hire and evaluation. Your accounts use your own nominal codes and cost centres. So the finance officer keeps a spreadsheet for each restricted grant, copying in costs from the accounts and allocating them to the funder's lines.
There are six of these spreadsheets. The project lead cannot see them without asking. A salary is split across three grants by percentages agreed a year ago that nobody has revisited. When a funder asks for spend to date, the figure takes a morning to produce and does not match the one given to trustees.
Why grant spend drifts from the accounts
The charity's accounts and each funder's budget describe the same money in different shapes, and nothing translates between them automatically.
- Funder budget lines rarely match your nominal codes.
- Shared costs such as staff, rent and overheads are split across several grants by hand.
- Transactions are coded to a cost centre without saying which grant they belong to.
- Budget revisions agreed with funders by email are not reflected in the spreadsheet.
- The project lead spends money without seeing how much is left on each line.
The root cause is that the grant is decided after the transaction is recorded, often weeks later, rather than when it is coded.
What drift costs the charity
Underspends are discovered too late to use, and funders may ask for unspent money back or wonder why the project did less than planned. Overspends on one line are found at the end, when there is no longer room to move costs within what the funder allows.
Finance teams spend days reconciling spreadsheets to the accounts before each funder report and at year end. Project leads make decisions without knowing their remaining budget. How restricted funds are treated is for your finance lead and independent examiner or auditor; the problem we fix is getting reliable figures in front of them.
How we build grant spend tracking
- Each grant's approved budget lines are entered once, with any revisions recorded with the date and the funder's approval.
- We map your nominal codes and cost centres to each grant's lines, agreed with your finance lead.
- Transactions in Xero, QuickBooks or Sage are tagged with the grant using tracking categories or a coding step, as they are recorded rather than later.
- Shared costs are allocated by rules you set, such as timesheet hours or agreed percentages, with the basis stored alongside.
- A live view shows spend against each budget line for each grant, with remaining budget and time left in the grant period.
- Lines approaching their limit, or clearly underspending, are flagged to the project lead and finance.
- Funder spend reports are produced in the funder's own line structure from the same data the accounts use.
| Cost | How it is coded | Where it lands |
|---|---|---|
| Volunteer mileage claim | Grant tag at approval | Funder line: volunteer expenses |
| Coordinator salary | Split by timesheet hours | Staff lines on two grants |
| Hall hire for the weekly group | Supplier rule | Funder line: venue costs |
| Evaluation consultant | Grant tag on the purchase order | Funder line: evaluation |
Allocation rules are yours and your finance lead's to decide. We implement them consistently and keep a record of the basis for each allocation.
Month end afterwards
The finance officer closes the month in the accounts and the grant view is already current. Project leads open a page that shows what they have left on each line and how far through the grant period they are. When a funder asks for spend to date, the report comes from the same figures trustees see.
Budget revision conversations with funders happen earlier, because underspends are visible while there is still time to agree a change.
Signs your grant tracking needs this
- Each restricted grant has its own spreadsheet.
- Grant spend figures do not match the accounts without a reconciliation.
- Shared salaries are split by percentages nobody has reviewed.
- Project leads cannot see their remaining budget.
- Underspends are discovered at the end of the grant.