What Working With an Outsourced Charity Bookkeeper Looks Like: The First 90 Days

You have chosen a provider and signed. What happens next is mostly invisible from your side, which is why the first ninety days is where expectations go wrong. This is the sequence: what gets built in the first two weeks, what a normal month looks like once the system is running, and what you should be holding by day 90.

What happens in the first two weeks?

Before you rely on monthly reporting, three things get confirmed: your opening balances, what cleanup is needed, and whether your account structure works. Bookkeeping a charity on top of a chart of accounts designed for a small business produces tidy books that cannot answer a T3010 question. A functioning existing chart may need adjustment rather than a rebuild, and current bookkeeping can often run in parallel while a historical cleanup proceeds separately.

Week one is access and inventory. Your bookkeeper needs read access to your bank accounts, your accounting file, your donation platforms and your payroll provider if you have one. They also need to establish what condition the existing records are actually in, which is often not what the outgoing treasurer believed.

Week two is structure. Your chart of accounts is rebuilt so that your revenue and expense categories map to the lines you will eventually report on. Restricted funds get their own tracking. Bank feeds get connected so transactions arrive automatically rather than by manual entry.

If there is a backlog, it is identified here and quoted separately. Cleanup is not part of monthly service.

What does your bookkeeper need from you before they can start?

Most delays in the first month are caused by four missing items, not by the bookkeeper. Gather these before your start date.

‍

‍

The grant agreements are the item most often missing and the one that matters most. A restriction that nobody documents is a restriction nobody can track.

Why does your chart of accounts get rebuilt first?

Because your annual return is easier to produce from a ledger that was designed to produce it. The T3010 asks for revenue and expenditure split in particular ways. If your accounts are structured to match those splits, the return is largely an extraction exercise. If they are not, somebody rebuilds the numbers manually every year.

The practical version is that a charity chart of accounts separates three things a business chart does not: revenue by source (donations, grants, program fees, investment income), expenditure by function (charitable programs, management and administration, fundraising), and funds by restriction.

Getting this right once removes a recurring annual cost. Getting it wrong means the same reconstruction work every June.

Our guide to setting up QuickBooks for a Canadian charity covers the software side of this.

What does a normal month look like once you are running?

A monthly cycle, not a continuous stream of requests. By month two you should be able to predict what happens and when.

Transactions arrive through bank feeds and are categorized. Bank and credit card accounts are reconciled against statements. Restricted fund activity is coded against the right fund. Donation platform settlements are tied out to the deposits that actually landed in the bank, including the processor fees deducted along the way.

Then the statements are produced. A charity board typically needs a statement of financial position, a statement of operations, and a fund summary showing what remains in each restricted fund. Some boards also want budget against actual.

What you should be doing during the month is small: approving coding questions, forwarding documents you receive directly, and flagging anything unusual. If you find yourself doing more than that, the arrangement is not working as intended.

What is not included, and who does it instead?

A bookkeeping engagement is narrower than "we handle the money," and the boundaries are worth knowing on day one rather than in month three.

Bill payment and accounts payable management are normally outside scope. Your bookkeeper records what was paid; someone at the charity authorizes and releases payments. That separation is also better internal control.

Payroll processing sits outside a typical bookkeeping engagement. A bookkeeper can assist with initial setup and will record payroll in the ledger, but entering hours, accruing source deductions and remitting them are a different service. Whoever processes your payroll, the employer remains legally responsible to CRA for deducting, remitting and reporting payroll deductions. Engaging a provider does not transfer that obligation, which is why the arrangement should be documented rather than assumed.

Donation data entry into your donor database is normally excluded, as are year-end donor acknowledgements. Your bookkeeper reconciles the totals your donor system reports against the ledger. Populating that system stays with you.

Audit and review engagements are excluded unless your provider holds the authorization to perform them. In Ontario that means a public accounting licence, which is not the same as a CPA designation. Where the provider is not licensed for assurance work, the arrangement is that your bookkeeper prepares audit-ready financials and works directly with your auditor, and an appropriately licensed practitioner performs the engagement. Our scope of service page sets out the full boundary.

What should you have by day 90?

Three completed monthly cycles, a reconciled opening position, and a board package you did not have to build yourself.

By the end of month three you should be holding reconciled bank and credit card accounts for each of the three months, restricted fund balances you can actually defend to a funder, and monthly statements delivered on a predictable date. You should also have a clear written statement of what is included and what is not.

If your books were behind when you started, day 90 may instead be the point at which cleanup finishes and normal service begins. That is a reasonable outcome, provided it was the plan rather than a surprise.

If you want to see how this maps to a specific engagement, our charity bookkeeping service page sets out the monthly cycle in detail.

Frequently Asked Questions

How long does it take to onboard a charity bookkeeper?

Two to four weeks to set up access and rebuild the account structure, assuming your records are current. Add the cleanup period if you have a backlog. A charity that is a year behind should expect the first genuinely normal month somewhere around month three or four.

Do we have to change accounting software?

Not necessarily. Most charity bookkeepers work in whichever cloud platform you already use. A move is worth considering if your current system cannot track funds, or if you are on a desktop file that only one person can open.

Who talks to our auditor?

Your bookkeeper, in most arrangements. They prepare the working papers, respond to auditor requests and provide supporting documentation. The audit itself is performed by a practitioner holding the required public accounting authorization, who is a separate party.

What if our restricted fund balances are wrong when we start?

They get rebuilt during onboarding from the grant agreements and the underlying transactions. This is common and it is not a reason to delay. It is a reason to find the funder agreements before your start date.

Can we stop if it is not working?

Monthly bookkeeping arrangements are usually cancellable on notice, commonly 30 days in writing. Check the cancellation and refund terms before you sign, and confirm what happens to pending work and your records during the notice period.

This article provides general information about bookkeeping practice and Canadian charity compliance. It is not accounting, tax or legal advice. Speak with a qualified adviser about your organization's circumstances.

‍