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How to Track Church Finances

How to Track Church Finances

Financial Administration for a church can vary with the preferences of the congregation and the requirements of a denomination. Larger churches usually hire full-time accountants to handle all aspects of finance. Small churches tend to handle finances independently and usually elect a member as the treasurer or secretary of finance. Often this member may have very little or no experience in the required bookkeeping, budgeting, establishment of policies and handling employment, taxes and donations. A trial and error process however, is not an option as inadequate tracking of churches finances inevitably leads to misappropriation and legal consequences.


Establish written polices for how the church will appropriate its finances to include allowable and forbidden expenditures. The policies should outline all procedures and approval processes for using petty cash accounts, loan proceeds, credit cards, other lines of credit and donations.


Keep detailed and accurate financial records for all proceeds coming into the church and all finances remitted to include donations, salaries and accounts payable. Churches should begin by keeping all receipts and then develop a ledger recording all incoming proceeds and expenditures using accounting software such as Quickbooks or Peachtree. In the event of discrepancies or at tax time, good recording keep will save time, money and headaches in providing evidence for the appropriation of funds.


Create a budget from the outset to keeps control of finances. This is even more critical for churches operating on a smaller budget. The nature of donations offer unpredictability affected by a variety of factors, including the economy. By keeping a prudent budget, churches can prepare for such circumstances by ensuring a surplus on hand and cutting expenses when warranted. Budgeting includes not only allocating money for expenditures, but also estimating proceeds and donations coming into the church. Churches should consider all expense when creating the budget to include maintenance, marketing, upgrades to facilities, salaries, allowances, program administration and activities. Establish a budget by discussing issues with board members and church officers to reach a consensus.


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