The Commission is under the control of the pastor and the Board of Stewards. They are tasked with receiving and disbursing funds, establishing and enforcing financial policies and procedures, and establishing a budget and financial reporting for the ministry. The pastor should receive frequent detailed reports of all receipts and disbursements as well as the overall status of cash reserves and pending obligations. To avoid the appearance of impropriety, the pastor should not count funds, make deposits, or write checks on his or her own.
Lastly, plan for retirement benefits for staff, and growth projects. Consider setting up an endowment fund to ensure the church has resources for future generations. Have regular strategic financial planning meetings can you work 60 hours & not get paid overtime to review progress and make necessary adjustments. The First Baptist Church of Greenville, SC faced financial struggles, with stagnant giving and a deteriorating building. To improve their stewardship, church leaders implemented a comprehensive program focused on education, engagement, and generosity.
#4: Keep the Chart of Accounts Simple and Understandable
A good budget must build in enough allowance for variations, of course, but a reasonable, consistent pattern of expenses will be comforting to a congregation. Second, your treasurer should generate a monthly church finance report. Our team has prepared precise directions for generating church finance reports and several useful downloadable templates. Second, you need to know the deadline for non-profit/charity reporting.
Audits and Financial Reviews
The subject of church finances and the pastor’s involvement has long been a topic of discussion and controversy. In rare cases there are those who have in place a “finance committee” that is independent of the pastor and/or the board. Who is responsible for the oversight and management of how to calculate the carrying value of a bond the church’s finances?
The church board held an emergency meeting, at which the pastor was removed and a new pastor was appointed. Nonprofit organizations are required by the IRS to use fund accounting. Fund accounting will keep track of the different types of donations you receive and ensure they are allocated to the right expenditures. This ensures transparency, unearned revenue enables matching when buyers pay in advance helps track fund usage, and builds trust with donors by showing that designated gifts are used appropriately. Before finalizing the chart of accounts, review it to ensure it aligns with your church-specific needs. Consider whether the structure will adequately support future growth or changes.
Should the pastor, being the spiritual leader, have input into the financial matters of the church? Should not those to which we assign responsibility for spiritual and eternal matters also help in the management of the “unrighteous mammon? These guidelines are important to consider for wise financial management. The pastor should be a signer on the church bank accounts as a matter of establishing new authority after a pastoral transition. Each church bank account should have at least three signers; the pastor, a steward (maybe the pro-tem or financial secretary), and a trustee. Manual checks should be authorized for issuance by two persons, one of which may be the pastor.
- As a result, annual giving significantly increased, allowing the church to expand its outreach programs and eliminate all debt within five years.
- The court ruled that the board’s actions were lawful, and concluded that only those checks and withdrawals having the approval of the current pastor should be authorized by the bank.
- Our ultimate security and hope for the future is not the size of our church bank account or financial outlook.
- You might want to have an account for each ministry team that might receive income or incur costs.
Budgeting and Financial Planning
Teach and communicate about giving and how the funds are being used to accomplish the mission of the church. Regular audits from an outside accounting firm will ensure that all funds are being managed responsibly. It helps to build trust within the church when donors know that the funds are being monitored and handled according to the established financial policies and procedures.
I understand this very well – and over the years, I’ve learned that a church’s positive financial outlook is not an accident. Rather, it results from a structured and intentional approach to financial management supported by robust church financial software. If your church falls anywhere on the financial spectrum between “underwater” and “well-funded,” then you’re very likely familiar with the stress of too many expenses and not enough income. Much of the responsibility to ‘turn things around’ falls on us, the pastors, and that burden is a heavy one. I like to air on the side of calling in the professionals, because sometimes I don’t know what I don’t know.
This means that a different person should be handling money, recording transactions, and reconciling bank accounts. With all the following best practices, start with the end in mind. If you don’t have a clearly established vision, it’s kind of hard to know whether you’re headed in the right direction. So if your church doesn’t yet have a vision and a mission statement, start there. Once you have these in place, use your church’s vision and mission to shape your goals and financial practices.