Case Study: Helping a Greater Manchester Independent Faith School

Case Study: Helping a Greater Manchester Independent Faith School Improve Cash Flow, Tighten Up Credit Control, and Prepare for Its First Statutory Audit with the help of Charity Specialists ATS Accountants

An independent faith school and registered charity based in Greater Manchester approached ATS Accountants during a challenging period in its development.

The school had grown significantly over recent years and was serving an increasing number of pupils. However, its financial administration processes had not kept pace with that growth. Fee debtor balances had accumulated to a level exceeding 50% of annual turnover, creating significant pressure on working capital and raising concerns amongst trustees regarding the charity’s long-term financial resilience.

At the same time, the organisation was preparing for its first-ever statutory audit. Trustees recognised that improvements were needed in financial processes, record keeping and internal controls if the charity was to navigate both its cash flow challenges and the forthcoming audit successfully.

The charity faced a combination of operational, financial and governance issues.

The most significant concern was the level of outstanding fee debtors. Over time, unpaid balances had mounted to more than half of the charity’s annual turnover. Whilst some parents had simply fallen behind with payments, the situation had been exacerbated by inefficient record keeping and reconciliation processes.

In many cases, payments had been made using incorrect references or no reference at all. As a result, receipts were not always allocated to the correct accounts. The school often struggled to identify precisely who owed what, and debtor records became increasingly unreliable.

The growing debtor book also created cash flow pressures. There were occasions when delayed collections threatened the charity’s ability to pay suppliers promptly, creating concerns about maintaining supplier goodwill and operational stability.

Alongside these operational issues, the charity was preparing for its first statutory audit and wanted assurance that its systems, controls and records would withstand external scrutiny.

ATS implemented a practical support programme focused on debtor recovery, cash flow improvement and audit readiness.

ATS allocated a dedicated team of two qualified accountants to undertake a detailed review of the school’s debtor records. Working through historical transactions, bank receipts and fee records, the team investigated discrepancies, corrected allocations and reconciled payments that had previously been posted incorrectly or remained unidentified.

This exercise enabled the charity to establish a far more accurate view of its debtor position and identify the families responsible for outstanding balances.

By providing specialist support, ATS also created much-needed capacity for the school’s leadership team during one of the busiest periods of the academic year, when management attention was heavily focused on GCSE examinations and associated operational demands.

Once the records had been cleaned up, our team assisted the charity with debtor recovery activities. This included contacting parents, discussing outstanding balances, clarifying account positions and, where appropriate, agreeing realistic repayment arrangements.

The introduction of structured credit control procedures ensured that future balances could be monitored more effectively, reducing the risk of similar issues arising again.

One of the biggest risks trustees face is making strategic decisions based on unreliable financial information. Before debt can be collected effectively, boards must first have confidence in the accuracy of the underlying records.

ATS worked closely with trustees and management to improve financial planning and reporting. We developed cash flow forecasting tools that provided greater visibility over future receipts and expenditure, helping trustees identify potential pressure points before they became critical issues.

As this would be the charity’s first statutory audit, trustees were understandably unfamiliar with the process and uncertain about selecting an appropriate audit firm.

ATS identified a number of specialist charity audit firms and obtained competitive quotations on the charity’s behalf. We reviewed each proposal with the trustees, helping them understand the strengths, weaknesses, fee structures and sector experience of the firms under consideration.

By providing independent advice throughout the selection process, we helped the charity make an informed decision and secure the timely appointment of an auditor.

Once the auditor had been appointed, ATS supported the charity by reviewing accounting records, strengthening reconciliations, identifying potential audit issues, improving documentation and preparing audit-ready schedules and working papers.

The project delivered benefits extending far beyond debt collection.

• Historical debtor records were cleaned up, unallocated receipts were investigated and confidence in the accuracy of financial information was substantially improved.
• The strengthened credit control process enabled the charity to pursue outstanding balances more effectively while maintaining positive relationships with parents and the wider school community.
• Trustees benefited from enhanced financial reporting and forward-looking cash flow forecasts, while the successful appointment of a suitably qualified charity auditor ensured the organisation remained on track to meet its statutory obligations.

Most significantly, the charity entered its first statutory audit from a position of preparedness rather than uncertainty.

This project illustrates how ATS Accountants supports charities beyond annual accounts preparation and compliance.

Rather than addressing issues in isolation, ATS provided a coordinated package of support covering debtor data cleansing, debt recovery, cash flow forecasting, audit preparation, auditor procurement and governance support.

By combining financial expertise, operational support and sector-specific charity knowledge, ATS helped relieve pressure on the school’s leadership team during a particularly demanding GCSE examination period while enabling trustees to focus on strategic oversight.

The outcome was not simply improved debt collection or audit readiness. The charity emerged with stronger financial records, enhanced reporting, better cash flow management, improved governance processes and greater confidence in its financial future.

Many charities face growing administrative demands, cash flow constraints, governance expectations and regulatory requirements.

At ATS Accountants, we provide practical, hands-on support tailored to charities, independent schools and not-for-profit organisations. Whether you need assistance improving credit control, strengthening financial reporting, preparing for a statutory audit, appointing an auditor, improving governance processes or developing reliable cash flow forecasts, our experienced charity specialists can help.

Every charity deserves financial clarity, strong governance and the confidence that comes from knowing its finances are under control. If your organisation is facing similar challenges, ATS Accountants can help.

This article is informed by the experience of Shahed Alam FCPFA, Director of ATS Accountants, charity finance specialist, charity trustee and former Big 4 auditor.

Shahed has advised charities on governance, financial management, independent examination, fraud prevention and trustee accountability. He delivers trustee training sessions based on recent Charity Commission investigations and governance failures, helping boards understand both their legal obligations and the practical realities of effective charity governance.

Having worked with charities of varying sizes and complexity, ATS understands the real-world challenges trustees face when balancing compliance, financial oversight, operational risk and strategic leadership. Read more about our work with charities and our specialist team here – Charity Accountants | ATS Accountants.

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