Tracking grant spending against the budget
How a non-profit can compare actual spending with each grant's budget, see money already committed by approved orders, and catch over-spending early.
By Achekam · · 4 min read · For Non-profit businesses in South Africa, Nigeria, Kenya
Nearly every grant comes with a budget, and nearly every funder report asks the same thing: for each budget line, what was planned, what was spent, and why the two differ. Many organisations answer by rebuilding the figures in a spreadsheet each quarter from bank statements and receipts, which takes days and still leaves room for argument about which costs belonged to which grant.
There is a quieter problem underneath. By the time a spreadsheet shows a budget line is overspent, the money has already gone. What a programme manager needs is earlier warning: not only what has been spent, but what has already been promised to suppliers and will be spent soon.
This article shows how to set up your books in Achekam so that the funder's question can be answered from the ledger, with committed spending in view before it becomes an overspend.
Shape your accounts around how funders ask
Every business on Achekam has its own double-entry ledger with a standard chart of accounts, created when the books first open. Accounts can be added, renamed or switched off, which lets you shape the chart to the way your funders report.
Start by laying your main grant budgets side by side. Most will use similar lines: salaries, programme materials, travel, venue hire, training, administration. Where the standard chart already has a matching expense account, use it. Where a funder's budget line has no match, add an account with a name the funder would recognise.
When a funder requires its money to be accounted for separately, consider separate expense accounts for that grant's main lines, named so the grant is obvious. Agree the approach with your accountant first: a chart that is too detailed becomes hard to post to correctly, and a mis-posted cost is worse than a slightly broader account.
Load each grant's budget by account and period
A business in Achekam can set a budget per account and per period, and compare it with the actual figures from its ledger. Enter the grant budget against the accounts you chose, spread across the periods in which you expect to spend it rather than evenly across the year. A training programme that runs in two intakes should have its budget in the months the training happens.
Keep the original approved budget as the funder signed it. If the funder later approves a re-allocation between lines, update the budget and keep a note of the approval, so that your report can show both what was first agreed and what was later changed.
Actual figures come straight from the ledger
Because the comparison reads the ledger, the actual column is only as good as the posting. That is the discipline that makes everything else work: every cost is posted to the right account in the month it belongs to, with its supporting document.
Achekam's management accounts add up an income statement for a chosen period beside the period before, and a balance sheet at period end, from your own journals, and both can be exported as PDF or CSV. AccountingTools' definition of management accounting describes this kind of internal reporting, which tracks revenues, expenses, variances and other measures to help managers act. One detail matters for non-profits whose year does not follow the calendar: the year-to-date preset in management accounts starts on 1 January, not on your own year start. If your financial year starts in March, April or July, choose the period dates yourself rather than relying on the preset.
Committed spend: money promised but not yet paid
Grant budgets are often blown by commitments rather than payments. A programme manager orders equipment, books a venue and confirms a facilitator, and the bills arrive weeks later.
In Achekam, approved purchase orders count as committed spend against budgets per expense account and period. The budget screen shows four figures side by side for each line: the budget, what has been spent, what is committed, and what is available. A purchase order only exists once a requisition has been approved, a quotation selected and the order approved by someone other than the person who raised it, so committed spend reflects decisions that have actually been signed off.
For grant management, the available figure is the one to watch. It tells a programme manager how much of a budget line is genuinely free to spend today.
A flag, not a stop
When approved orders push a line past its budget, the screen flags the line as over-committed. It does not block the purchase. That is a deliberate choice: there are good reasons to spend over a line, such as a re-allocation the funder has approved by e-mail but which has not yet been entered.
It does mean someone has to act on the flag. Decide in advance who reviews over-committed lines, how quickly, and what the options are: ask the funder for a re-allocation, move the cost to unrestricted funds, or cancel or reduce the order.
A monthly grant review routine
A short monthly routine keeps funder reports from becoming a quarterly scramble:
- Make sure all bills, receipts and payroll for the month are posted to the right accounts.
- Open the budget comparison for each grant's accounts and the month just closed.
- Read every over-committed line and record what will be done about it.
- Note explanations for differences while they are fresh, ready for the funder report.
- Export the management accounts for the period and file them with the grant papers.
Good tracking depends on good buying records; see showing funders how a supplier was chosen and spotting warning signs in purchasing. If your accountant keeps the books for you, when your accountant sets up and pays for your books explains how that works.
Take your largest current grant, enter its budget against your accounts this week, and run the first comparison when the month closes.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
