For most churches, accounting and financial record keeping takes a low priority on the ministry importance totem pole. In many cases, we know it’s important, but because we are busy with ministry demands, this task gets put on the back burner or pawned off to a volunteer.
While there’s nothing inherently wrong with using a volunteer to handle the church accounting and bookkeeping, there is a broader issue at hand with the entire system in general.
Church accounting, in many ways, is like the Wild West!
In almost every industry there are standards and norms. If you wanted to start a bakery, there are industry standards for ingredient and food costs, labor, overhead, etc. that you take into account and track. If you are involved in other industries, there are systems that can help you stay on the right track. The Church is different.
When it comes to accounting and finances in the church, there is a ton of misinformation out there. If you talk to 5 different people about keeping track of church finances you’ll probably get 5 different opinions.
It’s no wonder churches have trouble tracking and managing finances. It is easy to see why it becomes a such a burden for pastors. Often leaders succumb to human nature, and end up avoiding something they don’t completely understand or find confusing.
At simplyfychurch.com we created a standard system for churches to utilize that will create both the accuracy of tracking the information but also keep it easy and simple to understand so that it doesn’t hinder ministry.
Here are three essentials for your church’s accounting and financial record keeping.
1. Make it Understandable
Let’s face it.
When something is not quickly understood, many of us will back off and assume it’s too difficult.
Maybe that’s just me, but I’d contend there are others out there who avoid things simply on the basis of their initial impression of the facts.
Managing church finances may fall into this category for you. Perhaps you’ve been in ministry for a long time and had people handling it in a prior position so you didn’t have to worry about it. Maybe a previous person made it overly difficult because it worked for them, but when others tried to help or pitch in, they realized the complexity.
Talk about job security!
This might be your first ministry position, you have limited help and the burden falls completely on you.
Regardless of the reasons, there is light at the end of the tunnel.
Putting in a system that’s understandable is crucial.
If you’ve been around ministry long enough you know that volunteers and leaders will come and go. That one person you could rely on up until now suddenly has a new life circumstance and their commitment has faded. It’s happened to the best of us.
When that person leaves, it puts a new burden on others who now have to pick up the slack.
I could share many horror stories of ways that people were handling the books for a church and what I discovered once they left. While the system may have made sense in that person’s head, it definitely was not created in a way that was understandable or transferrable for the next person picking up the management of the books.
One Church had seven bank accounts and they were transferring money between them all. While bank transfers are nothing bad, what this person was doing was to physically transfer money to each account, and in some cases, an amount would come back to the original account. This was there way of handling designated giving. YIKES!
There was nothing “wrong” with that system, everything was accounted for and monies were getting to the correct bucket, however, when it was time for a new person to step in, there was no way they could match or take over that system. It was just too complex.
Keeping your financial system simple and understandable is crucial.
2. Make it Scalable.
As I’ve mentioned previously, if you’ve been in ministry long enough you’ve seen a lot. As you probably know, many ministries operate in reactive mode and put systems and fixes in place to fix immediate concerns, because it’s a fire now and needs attention.
Unfortunately, operating in a reactive mode creates tunnel vision where little thought is given to the future.
Maybe it’s not because of a “fire” but simply because we’re only looking at the situation as it stands now. I’ve come across countless ministries that need our help not because they are doing anything wrong, but quite plainly, they outgrew the previous system.
One of the primary reasons for me starting the company was out of experience in a church that had outgrown their systems. In ministry, its relatively easy to add people in the pews, but giving attention to our systems to match that growth is something that is very often neglected.
Your financial system may be small or basic. When funds are small, keeping track is pretty easy. When growth happens and complexity grows you might find your self playing catch up or with a system that can no longer keep pace.
3. Make it Accountable
This final essential is one of the most important items for your church’s financial system. You owe it to your donors, your members, your ministry and most importantly to God for your financial system to be accountable.
It should go without saying that this is one of the most important things to consider with your church financial system.
Your donors are expecting that you will manage their gifts with the utmost accountability meaning that every spending decision will be made with a plan in place and will have a purpose directly related to your ministry growth.
Donors are more likely to give and give generously to ministries and organizations where they are confident their gifts are being managed properly. When donors have confidence in your financial system, you will likely see an increase in number of givers and the amounts given.
Accountability provides guidance and protection for your staff and leaders who are in charge of managing the resources of your ministry. People are often apprehensive about church finances so why not put a system in place that helps to dispel any rumors and assumptions proactively?
Don’t put your church or staff in a position where anyone can question the integrity of your system.
We recently had a pastor tell us his board was making the decision in order to save money they wanted him to manage the finances. I can appreciate finding creative ways to save money and be frugal with ministry funds, however, having the pastor manage the finances is a terrible idea. Not only is that not the best use of the pastor’s time and talents, it could be opening the door to ruin his ministry.
Most pastors are above reproach and full of integrity. I am sure in this case there would be no issues with the pastor improperly using the ministry funds. However, what happens when there is a transaction that causes questions? Even if it eventually gets found to be completely legit, just the implication alone can create a problem or assumption in people’s mind that can discredit his ministry.
The small amount of money you save with a volunteer or multi-tasked staff member just aren’t worth the potential disaster potential it creates.
Finally, a financial system with accountability is honoring to God. The money given to your church is an act of worship. It is a serious and solemn act. Would it be too far a stretch to say that using ministry funds in a flippant manner is demeaning what was offered to God?
Having an accountable financial system in place is crucial for your ministry. Not only is it good, prudent financial practice, but also it’s an act of faithfulness.
We get it, ministry is sometimes messy. Ministry comes with enormous blessing, but at the same time can produce immense heartache.
Why would we try to haphazardly create a financial system with the reasoning simply because that’s the way we’ve seen others do it, or that’s how we’ve always done it before.
Your ministry is too important to rely on a system that is not time tested and proven to work within your ministry.
Published May 25, 2017