Payment Reconciliation for Charities: Simplifying Financial Reporting

Payment reconciliation — the process of matching incoming payments to the activities, events, or services they relate to — is one of the most time-consuming administrative tasks facing UK charities, and platforms like Plinth can eliminate it entirely through automatic reconciliation via Stripe Connect. This guide explains what payment reconciliation involves, why it matters, and how to simplify it.

TL;DR

• Payment reconciliation is the process of matching payments received to the services or bookings they relate to — essential for accurate financial reporting, audit compliance, and funder accountability.
• Manual reconciliation costs small charities an average of 6–10 hours per week, involving cross-referencing bank statements, spreadsheets, booking records, and cash logs.
• Automatic reconciliation through Plinth eliminates this task entirely — every payment is linked to its corresponding booking at the point of transaction.
• Reconciliation errors in manual systems typically run at 2–5%, leading to incorrect financial reports, wasted time investigating discrepancies, and potential compliance issues.
• The Charity Commission requires adequate financial records — automated reconciliation provides a complete, auditable trail that exceeds what most manual systems can deliver.
• Switching to automatic reconciliation can save charities £3,000–£8,000 per year in staff time and reduced errors.

Who this is for: Finance officers, bookkeepers, and charity managers responsible for reconciling income.

What Is Payment Reconciliation?

Payment reconciliation is the financial process of verifying that the payments your organisation has received match the services, activities, or bookings they were intended for. It answers the fundamental question: "Does the money in our bank account match what we expected to receive, and can we account for every pound?"

For community organisations, this typically involves matching:

• Activity payments to specific class bookings and attendees
• Room hire income to facility booking records
• Event ticket sales to event registrations
• Membership payments to member records
• Donations to donor records and campaigns

In a manual system, this means cross-referencing bank statements with booking records, spreadsheets, cash logs, and email confirmations — often across multiple systems that do not communicate with each other.

According to the Charity Finance Group's 2024 annual survey, finance administration is the second-largest consumer of staff time in small charities (after service delivery itself), with payment reconciliation being a significant component. The Charity Commission's CC8 guidance on internal financial controls specifically requires charities to maintain systems that can reconcile income to its source.

Reconciliation is not optional — it is a regulatory requirement and a fundamental part of responsible financial management.

Why Reconciliation Matters for Charities

Regulatory Compliance

The Charity Commission requires all registered charities to maintain "adequate accounting records" that explain all transactions and show the charity's financial position at any time. For charities with income over £250,000, this extends to a requirement for independent examination or audit, where reconciliation records will be scrutinised.

Even for smaller charities, trustees have a legal duty to ensure proper financial management. The Charity Commission's annual report consistently identifies inadequate financial controls as one of the top reasons for regulatory engagement with charities. Clean reconciliation records demonstrate that your organisation meets its legal obligations.

Funder Accountability

Most grant funders require evidence that their money was spent as intended. When a funder asks for a breakdown of how a grant was used, you need to be able to trace specific income and expenditure back to the activities they funded.

Example: A community centre receives a £10,000 grant to run free youth activities. The funder wants evidence that the sessions ran, people attended, and any income generated was properly accounted for. Without reconciled records, producing this evidence is time-consuming and unreliable. With Plinth's automatic reconciliation, this data is available instantly.

Many funders have increased their financial reporting requirements over the past five years. Charities with robust reconciliation systems are better positioned to meet these demands and secure repeat funding.

Fraud Prevention

Reconciliation is a key internal control for preventing and detecting fraud. By regularly matching payments received to services delivered, organisations can identify:

• Missing payments: Income that should have been received but was not recorded
• Duplicate payments: The same transaction recorded twice
• Unauthorised transactions: Payments that do not correspond to any legitimate activity
• Cash discrepancies: Differences between cash collected and cash banked

The Charity Commission's fraud report indicates that financial fraud affects an estimated 1 in 5 charities at some point. Regular reconciliation is the most effective frontline defence against financial irregularities.

Accurate Financial Reporting

Trustees, funders, staff, and regulators all rely on your financial reports to understand your organisation's health and performance. If reconciliation is inaccurate, everything built on top of it — management accounts, annual reports, funder returns — is unreliable.

Common consequences of poor reconciliation include:

• Overstating income by counting expected but unreceived payments
• Understating income by failing to record all cash received
• Misallocating income to the wrong activity, grant, or cost centre
• Delayed reporting because reconciliation takes so long to complete

Accurate reconciliation is the foundation of trustworthy financial reporting — without it, your organisation is making decisions based on unreliable data.

The Problem with Manual Reconciliation

How Manual Reconciliation Typically Works

In a typical community organisation without automated systems, the reconciliation process looks something like this:

1. Download bank statement (weekly or monthly)
2. Open booking records (spreadsheet, paper register, or booking system)
3. Match each bank transaction to a specific booking or service
4. Cross-reference cash records if cash payments were also collected
5. Investigate discrepancies (missing payments, unidentified transactions, amounts that do not match)
6. Update the finance spreadsheet or accounting software
7. File supporting evidence (receipts, invoices, booking confirmations)

For an organisation running 20 activities per week with an average of 15 participants each, this means matching approximately 300 individual payments per week to their corresponding bookings. Even at two minutes per match, that is 10 hours of work.

Common Pain Points

Multiple payment sources: When income arrives via bank transfer, card payment, cash, and cheque, it is often recorded in different places. Bringing these together for reconciliation is cumbersome and error-prone.

Missing or incorrect references: Bank transfers without proper references are notoriously difficult to match. A payment of £8 from "J Smith" could relate to any number of bookings if no reference was provided. Research suggests that 15–25% of manual bank transfers from individuals lack a usable reference.

Cash reconciliation gaps: Cash collected at sessions may not be banked for days or weeks. In the interim, it must be securely stored, counted (ideally by two people), and recorded — with all the associated risks of error and loss.

Timing differences: A payment may appear on your bank statement on a different date than the booking it relates to, particularly for card payments (which take 2–3 days to settle) and Direct Debits (which take 3–5 days).

Staff turnover: When the person who handles reconciliation leaves, their knowledge of which payments relate to which bookings often leaves with them, creating a gap that can take weeks to fill.

The Cost of Manual Reconciliation

By comparison, automatic reconciliation through Plinth costs nothing beyond the standard Stripe transaction fees (1.4% + 20p per transaction) — which are incurred regardless of how you reconcile.

How Automatic Reconciliation Works

The Plinth Approach

Plinth uses Stripe Connect to process payments in a way that automatically creates a permanent link between each payment and its corresponding booking. Here is how the process works:

1. Someone books an activity, event, or room through your Plinth-powered booking page
2. Payment is collected via Stripe at the point of booking
3. Plinth automatically records the payment amount, date, payer, and the specific booking it relates to
4. The payment appears in your Stripe account and is paid out to your bank on Stripe's standard schedule
5. In your Plinth dashboard, every booking shows its payment status, and every payment shows which booking it relates to

There is nothing to reconcile. The matching happens automatically at the point of transaction, and the records are available immediately.

What Automatic Reconciliation Gives You

Real-time financial visibility: See exactly how much income has been received today, this week, this month, or any custom period — broken down by activity, venue, or any other dimension.

Instant funder reports: Pull reports showing income and attendance for specific funded activities in seconds, rather than spending hours compiling data from multiple sources.

Audit-ready records: Every transaction has a complete, immutable record — who paid, how much, when, and what for. This exceeds the documentation standard that most auditors require.

Zero discrepancies: Because matching happens automatically, there are no unmatched payments, no missing references, and no investigation needed.

Staff time returned: The 6–10 hours per week previously spent on reconciliation is returned to your team for frontline service delivery.

Reconciliation for Different Payment Types

Activity and Class Payments

For regular activities and classes, automatic reconciliation via Plinth is the most efficient approach. Each session booking generates a payment record that is permanently linked to the attendee, the activity, and the date.

Block bookings (e.g., 10-week courses paid in advance) are reconciled as a single payment linked to all sessions in the block, making it easy to track both the payment and the attendance across the full programme.

Room Hire Payments

Room hire payments are often larger and less frequent than activity payments. Plinth handles room hire bookings and payments in the same way as activities — payment at booking, automatically reconciled.

For organisations that invoice room hirers (e.g., for corporate or organisational bookings), the reconciliation challenge is greater. Best practice is to:

• Issue invoices with unique reference numbers
• Request that the reference is included in the bank transfer
• Match incoming payments to invoices weekly
• Follow up on unpaid invoices within 7 days of the due date

Event Payments

Event tickets sold through Plinth are automatically reconciled in the same way as activity bookings. For events with multiple ticket types or pricing tiers, each ticket purchase creates its own reconciled record.

Cash Payments

Cash cannot be automatically reconciled — it requires manual processes. However, by moving the majority of payments online through Plinth, you can reduce cash handling to a small minority of transactions, making manual reconciliation of the remaining cash manageable.

Best practice for cash reconciliation:

• Count cash with two people present
• Record each cash payment against a specific booking or service immediately
• Bank cash at least weekly
• Reconcile cash records against bank deposits within one working day of banking

Mixed Payment Environments

Most organisations will have a mix of automatically reconciled (online) and manually reconciled (cash, bank transfer) payments. The goal is to maximise the proportion that is automatically reconciled.

Target payment mix for efficient reconciliation:

Achieving 80%+ automatic reconciliation is realistic for most community organisations within 3–6 months of implementing an integrated platform.

Setting Up Reconciliation Processes

For Organisations Using Plinth

If you are using Plinth for bookings and payments, your reconciliation process is minimal:

Daily: Glance at the Plinth dashboard to confirm that payments from the previous day are showing correctly. This should take less than 5 minutes.

Weekly: Review any cash or bank transfer payments collected outside of Plinth and record them manually. Reconcile your Stripe payouts against your bank statement.

Monthly: Generate a financial summary from Plinth for your management accounts. Cross-check total Stripe payouts against your bank statement. File any supporting documentation.

Quarterly/Annually: Export full financial data from Plinth for your annual accounts and audit preparation. Generate funder-specific reports as needed.

For Organisations Without Integrated Systems

If you are not yet using an integrated platform, implement these best practices to improve your manual reconciliation:

1. Standardise payment references — create a clear reference format and communicate it to all payers
2. Reconcile weekly, not monthly — smaller batches are faster and errors are easier to spot
3. Use a consistent spreadsheet template — include columns for date, payer, amount, reference, booking matched, and any notes
4. Designate a responsible person — reconciliation should be one person's clear responsibility, with a backup trained to cover absence
5. Separate duties — the person reconciling should not be the person banking cash (internal controls)

Frequently Asked Questions

How often should charities reconcile payments?

Best practice is to reconcile at least weekly. Monthly reconciliation is the minimum acceptable frequency for regulatory compliance, but weekly reconciliation catches errors faster and is less overwhelming than tackling a full month at once. With Plinth's automatic reconciliation, the question becomes moot for online payments — they are reconciled instantly at the point of transaction.

What if a payment cannot be matched to a booking?

Unmatched payments are one of the most common reconciliation headaches. If using Plinth, this should not occur for online payments as they are automatically matched. For bank transfers without references, check recent bookings for the same amount, contact the payer to confirm the purpose, and record your investigation notes. Persistent unmatched payments should be flagged to your treasurer or finance lead.

Do we need accounting software as well as Plinth?

Plinth handles payment reconciliation (matching payments to bookings) but is not a replacement for accounting software. Most charities will still use accounting software (such as Xero, QuickBooks, or Sage) for broader financial management — producing statutory accounts, managing expenditure, handling payroll, and filing tax returns. Plinth's export features make it easy to transfer reconciled income data into your accounting system.

How does automatic reconciliation work with Gift Aid?

Gift Aid applies to donations, not payments for services. Since most payments processed through Plinth are for activities, events, and room hire, Gift Aid does not typically apply. If your organisation collects donations alongside service payments, these should be processed and recorded separately through your fundraising or donor management system.

What records should we keep and for how long?

The Charity Commission recommends keeping financial records for a minimum of 6 years. For reconciliation purposes, retain: bank statements, payment records (automatic from Plinth/Stripe), cash count records, invoices issued, and any correspondence related to payment queries. Digital records stored in Plinth and Stripe are automatically retained and accessible at any time.

Can we reconcile payments from multiple sources in one place?

Yes, but with some manual effort. Plinth automatically reconciles all payments processed through its platform. For payments received through other channels (cash, bank transfer, other payment platforms), you will need to record these manually — either in Plinth as manual payments or in a separate reconciliation spreadsheet. The goal should be to minimise payments outside of your integrated system.

Conclusion

Payment reconciliation is a necessary but time-consuming aspect of charity financial management. For community organisations running activities, events, and room hire, the most effective solution is to eliminate manual reconciliation altogether by using an integrated platform like Plinth that automatically links payments to bookings at the point of transaction.

The benefits are clear:

• Save 6–10 hours per week of staff time
• Eliminate reconciliation errors that affect financial reporting
• Produce audit-ready records automatically
• Generate funder reports in seconds rather than hours
• Free your team to focus on delivering services rather than matching spreadsheets

Ready to eliminate manual reconciliation? Book a demo of Plinth to see how automatic payment reconciliation works in practice.

Recommended Next Pages

• Best Payment Solutions for Charities – Compare the top payment platforms for UK charities and community organisations.

• The Complete Guide to Stripe Payments for Charities – Everything you need to know about Stripe fees, setup, and nonprofit discounts.

• Online Payments vs Cash Collection for Charities – A detailed comparison of digital and cash payment approaches.

• How to Take Payments for Activities, Events and Room Hire – A practical guide to collecting payments for your services.

• Plinth Payments Features – See how Plinth's integrated payment processing works in practice.

Last updated: February 2026

For more information about payment reconciliation for your charity, contact our team or schedule a demo.