Ensuring compliance: Financial systems and controls - set-up requirements

Financial system set-up requirements. Actions to take:

Financial delegation

Your written delegation authority should set out the financial limit levels for committing and authorising expenditure by different users in your business.

Open bank account

A business MUST have its own bank account in its own name. Open a bank account for your social business as soon as it becomes a legal entity.

This process may take some time as the bank carries out its checks, particularly where there are many Board members, so please allow enough time to do this. 


Guide to opening a bank account

Bank mandate

The Board will need to agree who will be bank signatories and authorise the bank mandate. 

All cheques, payment and banking transactions should require a minimum of two independent signatories in line with good financial controls, to mitigate against any potential risk of theft and fraud. 

Select and appoint accountants and other professional advisors

You should consider appointing a firm of accountants to help with financial compliance, particularly in relation to managing your business’ initial relationship with HMRC. 

Seek quotes from various firms of accountants, setting out your business’ specific requirements in relation to general accounting and financial support, preparation of financial statements, audit or independent examination, payroll and tax advice. 

Consider working with accountants and advisors that specialise in providing support to the third sector, charities and social businesses as they could provide wider added value and tailored support to your business. 


Draw on the Social Business Wales network to find out more about accountants and advisors who specialise in services for social businesses.  

Ask other founders via the ‘Social Business Wales start-up peer support’ Facebook page

HMRC registration - general

Register the business with HMRC. Your appointed accountant should be able to advise and work with you on this. 


HMRC Services 

Set up financial records and financial system 

The type of records and systems you keep will depend on the complexity of your finances.   

While simpler finance can be maintained on an Excel spreadsheet or in manual books, it may be better for a business to use a simple cash recording system (e.g. Moneysoft’sMoney manager or VT cashbook) to maintain the records. Xero, QuickBooks and Sage also offer more enhanced accounting options for electronic management of finances. 


Money Soft 

VT Cash Book 


Write financial procedures and controls document 

These are the main rules relating to how your business manages its finances. You will need to ensure that you have set up enough financial controls to mitigate against the risk of fraud. 


Financial control in Social Business 

Internal Financial Controls that Help Charity Trustees 

Set up payroll system and Real Time Information arrangements 

If your business employs staff, you will need to register as an employer with HMRC.  You can either run and manage your own payroll system or sub-contract to a third party, e.g. your accountants or the WCVA’s payroll service etc. to manage your payroll on your behalf. 

HMRC operate a Real Time Information (RTI) process where details of employee pay and deductions are directly uploaded from payroll information.   

Again, your accountants or payroll agent should be able to advise on the set up of a payroll system and the RTI process or undertake the work on your behalf. 

Monthly deductions from pay (PAYE, NI, student loan deductions etc.) will need to be paid over to HMRC monthly and any pension deductions to the relevant pension provider.


Register as an Employer with HM Revenue and Customs (HMRC) 

Payroll Outsourcing Services from WCVA 

Financial reporting to your Board 

You will need to agree what financial information will be reported at each Board meeting to help Board members meet their financial duties and responsibilities. 

Consider a system for reporting and approving annual budgets and financial statements, as well as regular management accounts information. 


Business Wales: Keeping Track of your Finances