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 […]
Before launching into a study of anything, I like to make sure I have at least a basic understanding of what the topic is all about. So, before launching into church budget development I looked up a few definitions of what a budget is: An accounting device used to plan and control resources of operational […]
Our next series of posts will be a discussion of budget planning for the church. As I commented on our other blog (Faith Based Accounting: July 27, 2012) “Attitudes about budgets vary greatly among churches. Some churches operate without one, a practice I definitely do not recommend. Many others swing to the other extreme expending […]
Churches have embraced the digital world and are becoming very proficient in the use of computers. A vast array of applications has been made available to the church including sophisticated financial accounting and reporting, childcare security, online purchasing, online tithing, phone trees and coffee bars with free wireless internet. Without a doubt, churches have become […]
A close cousin to ignoring the bank reconciliation is maintaining an excessive number of bank accounts. Rather than using their church accounting software to take care of measuring and tracking restricted giving, some churches open separate bank accounts for each new special gift that may arise. This results in a number of problems: Burdens the […]
One of the more serious traps churches can fall into is poor bank reconciliation practices. Some of the ways we have seen this played out: Due to understaffing and time pressures, bank accounts are not reconciled for months at a time. Bank reconciliations are not complete consisting only of checking for cleared checks and surface level comparison […]
Many churches think that their state sales tax exemption applies to ALL TRANSACTIONS. Unfortunately, this is not the case. An exemption from sales taxes only allows the church to avoid taxes on goods and services that it purchases in carrying out its mission. It does not apply to things that it might sell! There is […]
Because of staff size many churches have poor segregation of tasks Next to the absence of well-defined, written accounting and management policies, the most common weakness we have noticed in churches is the lack of adequate segregation of duties. In other words, the accounting tasks are not spread out among enough individuals. This is […]
Getting off on the right foot – hiring right One way to avoid unhappy situations is to begin on the right foot. And in personnel matters, that means hiring right. Churches should follow prudent steps in hiring their employees. For starters, a church must know what it is looking for in a new employee. That […]