Accounts in a Receipts & Payments (R&P) format are simpler to prepare and offer a snapshot of the state of church finances at the end of the financial year.
R&P accounts focus on cash movements in and out of the PCC’s bank accounts during the financial year (1st January to 31st December). It is normal to prepare a separate R&P account for each individual fund and to pull the strands together in a Statement of Assets and Liabilities.
You may prefer to use the more detailed Accrual Accounting method (see below), although this is not required until your PCC's gross income exceeeds £250,000.
The Parish Resouces website incudes detailed guidance on producing Receipts and Payments Accounts.
Accrual is a more complex method - if you are a new treasurer with no previous accounting background, and your parish income is less than £250,000, you might prefer the simpler Receipts and Payments accounts method.
The Charity Commission suggest three occasions as examples of where accrual accounts would be appropriate: