Did you know that there are over 47,000 churches in the United States? If you currently run a church or will be running one in the near future but want to learn more about church accounting, you are in the right place. We are going to cover some of the best practices, accounting software options, and even some outsourcing options.
Keep reading to learn the ins and outs of church accounting.
Church Accounting Best Practices
You always want to make sure that you protect the church’s finances and show accountability through your accounting system because Church Accounting vs. For Profit Accounting is two different worlds.
One of the things you want to make sure you do is spread out your financial duties. Although you don’t want to think about becoming a fraud victim it is important to implement safety measures in case.
Assign financial responsibilities to multiple people to create a layer of accountability among employees. Make sure that each person is completing their own tasks and not theirs and someone else’s.
Take the time to understand the IRS requirements and GAAP. GAAP (Generally Accepted Accounting Principles) are the guidelines that every accounting professional has to follow. It also covers church tax rules.
Software Options
There are a few accounting software programs out there that you can choose from. They can handle contributions, fundraising events, and tithing. You want to make sure that you opt for software that also handles administrative work such as incoming and outgoing payments, and budgets.
If you run a smaller church you will not need complicated financial tracking software. An all-in-one management software is probably enough for smaller churches to help simplify inbound cash flow.
Outsourcing
Because most churches have a tight budget, bookkeeping might get pushed to the side. This is not good news for accounting and keeping track of the finances side of the church. A great option is to outsource bookkeeping to let a professional handle the books, payroll, and other finances.
This allows the church staff to focus on the church’s mission instead of dealing with finances and books. A professional will help you determine what your annual expenses are and outsourcing this will allow you to budget around consistent expenses because the outsourced services are paid for.
Most church’s notice a reduction in their expenses when they outsource a bookkeeper rather than staff a bookkeeper. These savings can then allow the organization to hire staff in different departments where they need more help.
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Feeling Like a Church Accounting Pro?
Now that you know more about church accounting we hope that you can feel more comfortable making certain financial decisions moving forward. We hope that you can find the perfect program and person to take care of your church accounts.
Did our blog post help you out today? Please feel free to browse the rest of this section for some more helpful reads.
