Does the school that’s registered as a PBO need a bookkeeper too?
Question
A friend of mine has opened a private school, which is also registered as a Public Benefit Organisation (PBO). Should they hire a bookkeeper to handle the finances and accounting?
Answer
A complete set of books would be required as a PBO is like a ‘company’. So yes, they should hire a bookkeeper with experience. Also, because the tax treatment of a PBO is different to that of a company, so the school may need help with this.
Financial statements have to be drawn up on an annual basis and monthly management accounts are always important, as a means to report as to the stability of the PBO to relevant parties (including donors).
Just remember that there are two main areas of tax that affect PBOs. The first deals with tax status of the PBO itself, Section 10 (1) (cN). The second deals with the tax-deductibility of donations in the hands of the donor, Section 18A. To find out more about these, refer to chapters P07 and P06 respectively, in your Tax Loose Leaf.
