CaseStudy
Brick by brick
Increased demand for anti-poverty charity following the pandemic pushed its finances and systems to breaking point. Financial controller Harriet Foxon MAAT was central to its overhaul
Words: Annie Makoff Photography: UNP / Jon Super
Project casebook
Company data
Income (total gross)
Beneficiaries in 2024 and 4,339 referrals
and 110 volunteers
Results
Charity expenses
Donations
Total grants in 2022/23
The challenge
Creating a robust finance function to improve governance, accuracy and financial and social impact reporting in response to charity growth.
Finance
Headcount: One, but currently recruiting for a finance assistant.
Key teams: Foxon works closely with CEO Keely Dalfen, alongside department managers and suppliers.
Approach
Bringing the finance function back in-house, tidying up payables ledger, investing in key back-office functions and fully utilising Xero’s capabilities.
Results
• Improved governance, dashboard reporting and social impact reporting.
• Contributed to social investment funding worth £2.3m.
• Processing 77 invoices using AI software now takes one hour, instead of one day doing it manually.
A century of service
For well over 100 years, anti-poverty charity The Brick has stayed true to its original aim: to support local people living in need. Its early history as the Queen’s Hall Methodist Mission in 1908 provided clothing for struggling families as well as soup kitchens and Christmas Day breakfasts.
Now known officially as Queen’s Hall Action on Poverty, but more familiarly as The Brick, the charity supports individuals and families who are either homeless or at risk of homelessness across the Wigan and Leigh areas.
The Brick has many contracts with local authorities but also relies on community grants as well as revenue from its three charity shops. Its work has never been more important. Figures from homelessness charity Crisis show that the number of rough sleepers has increased by 61% since 2014 and 120% since 2010. In Wigan, 356 people, including 160 children, were homeless in 2022.
THE SECTOR
The Brick is a charity serving the homeless and underprivileged in the Wigan area
THE CHALLENGE
As a historic charity, many of The Brick's systems and processes were in need of modernisation
THE OUTCOME
An integrated system was developed, allowing the finance function to have visibility and forecasting capabilities
Funders don’t fund core costs, they fund projects, so you have to have the economies of scale in place in order to develop a finance function.
Image: Mark Waugh
Meeting increased demand
In this environment, charity growth was inevitable.
“Over the last two years, we’ve grown from providing 20 beds to 96 beds across our housing portfolio and that number is only going to increase,” says Harriet Foxon MAAT CIMA, financial controller and data manager at The Brick.
Foxon first joined the charity in 2019 as an accounts assistant across both finance and administration because the charity’s size at that point didn’t necessitate full-time roles. “The finance function has grown hugely, especially since Covid-19, and it’s just no longer possible to do both roles,” she says.
In fact, the charity didn’t have a finance function at all in 2019. Instead, it was outsourced. Things only really improved once it brought the finance function back in-house, Foxon explains.
“We previously had one admin manager who was responsible for paying suppliers and processing expenses and she was extremely organised, but everything was done manually.”
THE BRICK'S SERVICES
· Emergency accommodation
· Supported accommodation
· Affordable food community
· Street outreach and engagement service
· Skills training
· Cycling initiatives
· Furniture and clothing welfare scheme
Keeping track and knowing what is coming up is hugely important for small charities like us.
A better view
The charity also had multiple bank accounts and petty cash was used for every department, making it difficult to keep track of outgoings. Moreover, gaining an accurate picture of the charity’s financial health or even tracking finances of individual department spending was nigh on impossible.
This made grant applications particularly problematic and funding was therefore often restricted due to lack of financial information available.
There was also a lack of strategy around cash flow, with many suppliers being paid immediately. This worked well when the charity was smaller and had fewer outgoings, but as it grew it became important to take full advantage of payment terms to hold on to cash a bit longer.
“It’s about keeping track of cash flow and knowing which payments are due and when,” Foxon says. “If you always pay suppliers straight away regardless of the amount, you’re likely to get into issues when presented with a huge invoice from one of your largest contracts later on. Keeping track of all this and knowing what is coming up is hugely important for small charities like us.”
Constructing a finance function
Foxon and her then-manager (now CEO) Keely Dalfen set about creating an entirely new in-house finance function from scratch after it became clear that the existing manual systems, along with the outsourced accounting function, were no longer fit for purpose. Turnover in 2019 was £900,000, with a total of 27 staff, but the charity was growing fast to keep pace with demand, so significant changes had to be made.
The key driver in bringing the function back in-house, she explains, was winning two large council contracts that provided additional revenue to invest in back-office functions.
“Funders don’t fund core costs, they fund projects, so you have to have the economies of scale in place in order to develop a finance function,” she says. “For many small charities, it’s just not affordable and that’s the biggest challenge. We were very lucky to be able to do this.”
Social Impact
safe beds in 2022/23 for 315 individuals
individuals provided with emergency beds in 2021/22
individuals with secure, longer-term supported accommodation
telephone requests for homeless support in 2022
households have accessed food community support since October 2022
people accessed activities, training or skill programmes in 2021/22
I was off for one day recently and the next day I had 77 invoices to process. Once, that would have taken an entire day to complete, but with AI, it took an hour.
Building connections
Their approach was to expand the charity with the ‘right level’ of infrastructure, but in a controlled way.
Foxon focused initially on getting the payables ledger up to date – a process which in itself took months – and then began the slow task of streamlining databases, merging bank accounts and introducing systems. Rather than making a sudden transformation, she describes the process as a “continuous improvement, year-on-year”.
Xero is at the heart of the function and Foxon takes full advantage of its additional functions and capabilities, such as bank reconciliation, data capture and Xero tracking categories to monitor department performance or spending. Xero’s AI features are also used for processing invoices.
“I was off for one day recently and the next day I had 77 invoices to process,” says Foxon. “Once this would have taken me an entire day to complete, but using AI software it just took an hour, so there’s a huge time saving.”
Trust in your team
“Making managers responsible for their own budgets rather than seeking CEO approval for everything has made the team a lot more conscious about their own spending decisions,” Foxon says. “This is really important because as a charity we’re ultimately accountable to our donors and investors.”
So how has the charity benefited from an improved finance function and what difference has it made to general operation?
“It’s made a huge difference,” says Foxon. “It has made applying for funding a lot easier. You need to provide detailed financial insights, which we now have. We can delve deeper into our accounts and provide the sort of information that funding boards are looking for.”
In fact, The Brick has just been awarded a social investment worth £2.3m to purchase new properties – something which required a lot of due diligence and financial insight. This information would not have been available back in 2019.
“I do not think we would have been awarded this fund without this crucial data – it would have been deemed a high risk,” says Foxon. “It’s thanks to improvements across the finance function and better utilisation of technology that we’ve been granted such an incredible amount.”
Foxon is also able to monitor the financial picture, including profit and loss, and variance reports across different departments. Every five months, she provides detailed finance reports for trustees.
She says: “It’s improved the quality, accuracy and accessibility of financial information, which is essential for the charity’s trustees. Having this information enables them to make informed decisions on what the beneficiaries need and how we can achieve the charity’s objectives.”
And, as she points out, it’s not just the financial infrastructure that’s expanded and improved, it’s everything: governance, dashboard reporting, social impact reporting, HR policies, procedures, IT, fundraising, health and safety and so on. Foxon adds: “It’s all driven by charity growth and the social impact that we make and can demonstrate.”
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Brick by brick
Increased demand for anti-poverty charity following the pandemic pushed its finances and systems to breaking point. Financial controller Harriet Foxon MAAT was central to its overhaul
Words: Annie Makoff Photography: UNP / Jon Super
