A strong platform for managing the church budget begins with the chart of accounts. For any non-accountants reading this, a chart of accounts is simply a list of the church’s general ledger accounts used to generate financial statements. The accounts are listed according to where they appear in the church’s financial statements beginning with the […]
Now it is time to turn to our fourth and final category, budget administration. It doesn’t matter how much time a church puts into budget development or even prayers for that matter, if plans are not put in place to administer the budget once it is implemented. Not providing adequate oversight of budget administration is […]
Done correctly, budget planning is a time consuming process. A church should not build the rocket as it is launched! Effective budget planning starts well before the budget year begins. The following is a suggested budget development schedule based on a March 31 year end. Notice that the work begins six months before day one […]
The purpose of step five is to make sure the church is on mission in its budget planning. In step five the church takes one last look at its budget before moving into the implementation stage. This should include a critical analysis of all budget requests submitted by ministerial and lay leaders confirming that the […]
This may be the shortest post in the budget development discussion but it is the most important. The purpose of step four is to allow church staff to PLAN WELL for the upcoming church year. And, this will be impossible if the church does not COMMUNICATE well. The allocation decisions must be clearly communicated to […]
Step three involves the allocation of the available funds to various church activities as determined by the mission of the church. It must be stressed; there is no one way to do this because each church has its own specific calling and there is a wide array of ministry focus points among churches. But, in […]
The purpose of Step Two is to allow church ministers and lay leaders to know “how much they will have to work with.” This is extremely important on two levels: If ministers are given too low a figure, they may become discouraged even before the fiscal year begins. They may begin to think and mull […]
The purpose of Step One is to make sure you are staying on “mission”. This is accomplished by reviewing the church’s mission, vision and strategy. Each church needs to know three things: – Who it is. (Values) – Where it is going. (Mission) – How it is going to get there. (Strategy) Without knowing these […]
There is no one way to do a church budget. There are a variety of approaches and for the most part, no one way is better than the other. Remember mission and vision? These two factors will also impact how a church goes about its financial planning. I do have to point out however, that […]
I ended the last post by asking, “Are these definitions sufficient?” Obviously the answer is no because that would be the end of this blog series! Keep in mind that the three definitions posted were all written by accountants… As a result, the main flaw with these definitions is that they appear to be about […]