During onboarding with a grant-funded not-for-profit, we did something unglamorous: we listed every award the organisation had been given and set it against the income actually received, line by line.

Over £200,000 of funding had paperwork that had never been completed. The work had been done. The costs had been incurred and paid. The claims that turn an award into cash had simply never gone in. The claims were then completed and submitted, and the organisation now keeps a funding register that is updated monthly and reviewed at every board meeting.

What strikes me about that case is how ordinary the cause was. There was no dispute with the funder and no disagreement about eligibility. There was a small team carrying delivery and finance at the same time, and a reconciliation that nobody owned.

The same habit that surfaces this in a trading business surfaces it here. You ask how something is being funded, and then you check whether the answer matches the ledger. Most of the time it does. When it does not, the number is usually larger than anyone expects.

The pattern repeats across organisations of different sizes. In our experience, the money goes missing in four places.

• The award is never entered anywhere financial. It sits in the offer letter and in the chief executive’s head. The ledger only ever sees the cash that arrives, so nothing flags what has not arrived.
• Claims run on the funder’s calendar, not yours. Quarterly claim windows do not line up with month end, so they fall between routines and get remembered late or not at all.
• Restricted funds are not tracked separately. Everything lands in one income line. You can see total income, but you cannot see which award it belongs to or how much of it remains unspent.
• Staff time is charged to the project but never claimed. Payroll runs correctly, the costs are eligible, and the apportionment that would put them on a claim is never calculated.

None of these is a technical accounting failure. Each is a missing step in a routine, which is why they survive year after year in organisations with perfectly competent people.

Unclaimed income is the obvious loss. There is a second cost that shows up sooner.

When the records cannot show where a particular award went, the funder’s question becomes a research project. Somebody pulls bank statements, cross-references invoices, and reconstructs an answer that should have taken ten minutes. That work happens at the worst moment, usually while a renewal application is being written.

Funders read that. They see the response time, the quality of the evidence, and whether the figures in the claim reconcile to the accounts. We have watched funders, councils and trusts ask harder questions of organisations that were slow the previous year. That is observed behaviour rather than a rule change, and it is enough of a pattern to plan around.

There is also a board cost. Trustees who cannot get a straight answer about restricted balances start asking about everything else, and the finance discussion takes over meetings that should be about delivery. Once figures arrive on the same date each month, that conversation shrinks back to ten minutes.

The fix is a reconciliation, run on a fixed date, comparing two lists that most organisations already have.

The first is a funding register: every award, the funder, the total, the period, the claim dates, the conditions attached, and what has been claimed and received so far. The second is the ledger, with each award carrying its own tracking so income and spend can be read separately.

Each month you compare them and answer three questions. Which claims are due or overdue. Which awards show spend but no matching claim. Which restricted balances remain, and whether the spend profile will use them inside the funding period.

That is most of the job. It takes an hour when the bookkeeping underneath is complete, and it takes a week when it is not, which is why we start with the records before we build any reporting on top of them. By the end of our first ninety days with a client, this sits in a timetable with a named owner and an agreed delivery date, so the funding position is on the board’s desk before the meeting rather than after it.