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Recording services provided for free

How to record services provided for free

I work for a charity that, in addition to it's main activities,  provides an training and consultancy service (quite small).  This generates a surplus for the organisation.  However, sometimes these services are provided for free (depending on the organisation they are provided to).  My first question is how do I record this in the accounts?  My second question relates to the cost recorded.  When an employee is charged to a paying client then there is an element of profit built into this, on top of their salary related cost.  Do I record that amount or the cost to us.

Many thanks


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16th Jan 2019 13:11

1. Assuming that your first question is about the costs you incur in providing free services (because there is no income needing to be recorded) call it something like “costs of providing free services”.

2. I don’t entirely understand the question. Here you have both income and costs to record. On the income side you record the income you receive - I am not sure why that is not obvious - and on the costs side you record the costs you incur - again I am not sure why ....

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16th Jan 2019 13:33

Charities do not make profits - they may have surpluses
from the costs of their activities (salaries in this case) which are then usually carried over from one year to the next as a surplus - If as part of a restricted fund the costs are less than the grant, the funder may want a repayment so no surplus (profit in your words).
Services provided at no cost, while often reported to funders as a monetary value as say, "jobs safeguarded" at £X , are not part of the accounts.

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