The Best Way for a Church to Handle Bookkeeping

//The Best Way for a Church to Handle Bookkeeping

The Best Way for a Church to Handle Bookkeeping

The business operations of churches are unlike any other. Churches benefit from and must comply with laws designed specifically for them. While dealing with those tailored codes, churches must also adhere to laws related to finance and tax in general. Keeping up with all of the variables in can present unexpected challenges. Here are some thoughts on how to approach bookkeeping for churches.

 

Changing Needs as Your Church Grows

If you serve on the board of your church you are most likely aware of at least some of the hurdles required for church finances. Churches must track donations, vendors, events, payroll, contributions, and payments to private contractors, to name a few. Most often, bookkeeping responsibilities begin with a committee. At some point, however, a church will grow to a point where they will likely need to outsource some services. You may need help just at tax time or all year, depending on your size. A CPA or bookkeeper can provide expertise and suggestions.

 

Building Trust Through Financial Reporting

The trust of your community is no doubt important to you. You can help build it through consistent and transparent financial reporting. Church West Insurance Services warns that fraud can occur in churches, especially when the funds received do not accompany a service rendered. Regular preparation of financial reports keeps irregularities in check. Church bookkeeping should certainly include a more than just a tally, but rather an end statement for all interested parties.

High level donors, trustees, other churches, board members, and financial institutions may want to see a clear layout of a church’s financial status. Many churches undertake an annual audit, a detailed financial report prepared by a CPA. Lenders will trust an audit above other reports, which makes audits a clear choice for other interested entities as well. Above and beyond those factors, your in-house financial committee will then have a clear picture which it can use to make important decisions.

 

When Your Church Should Outsource its Bookkeeping

Moving to outsourced bookkeeping for a church most often arrives as an obvious choice, when the responsibilities or the complexities of financial management have grown too great. Hiring a CPA to prepare church financial records lifts considerable weight from committee members, leaving them free to run the other necessary functions. When a competent church committee handles the finances, it may actually make the choice to outsource more difficult. The most obvious reason to reach beyond the in-house resources of a church is when an audit is required. Lending institutions ask for audits to gain assurance that financial records are correct and, in almost every case, audits require an independent entity to prepared them.

 

Bookkeeping for Churches

What is the best way for your church to handle its bookkeeping? That depends on your church’s needs, the skills of its staff, and complexity of your church’s finances. Can your finance committee handle all of the responsibilities with ease? Do you have in-house financial experts at your disposal? Is your church looking for a loan to fund expansion? Those are all questions to consider. If the answers to financial issues do not come easily, then an outsourced CPA may be the best choice.

If we can help, please give us a call!

 

PHOTO: Pixabay / CC0 Public Domain

By |2018-11-30T14:27:01-05:00December 3rd, 2018|Small Business|0 Comments

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