The very next thing you need to do if you are about to start a new Church or are currently on staff at a Church is approach your fellow staff members and suggest outsourcing your accounting function to a qualified accounting firm. Outsourcing works for start-up Churches, small Churches, medium Churches, and even Mega-Churches. You didn’t decide to get into the ministry because you are passionate about Church finance. Pastors don’t get up in the morning excited to fire up their computer and plow into their Church’s budget in Excel. Pastors get into the ministry because God called them to lead others to Christ in their capacity as a minister of the gospel.
Technology Levels the Playing Field in Church Accounting
In a typical Church people get all squirmy in their seats when the Church’s finances are being discussed and everyone can’t wait for it to be over. In my experience this is due to two weaknesses: Lack of Knowledge and Poor Budgeting. This is especially true for small and/or start-up Churches. Ten years ago it would have been nearly impossible for a small Church to take advantage of the benefits of outsourcing their accounting department. The technology was in place, but was so expensive that even those accounting firms that could provide the service would have had a hard time finding a price point that small Churches could afford.
As technology has improved the cost has dropped and now even Churches that are just in the beginning stages of fundraising can afford the tools to combat the two weaknesses of typical Church accounting.
Your Church isn’t Typical, so don’t use Typical Church Accounting Practices
I talk with Pastors every week who are frustrated, desperate, and overwhelmed with the finances of their Church. In a typical small Church setting a finance team or, as was the case in my Southern Baptist Church growing up, a Finance Committee is formed to take care of the Church’s finances. This group is usually made up of people who own a small business, are a banker, or are somehow more financially savvy than their peers. These groups meet on a regular basis to help create the annual budget and to go over the financial statements of the Church. On a daily basis a small or start-up Church might have an accounting clerk or bookkeeper on staff to take care of paying bills and taking deposits to the bank. And that is the extent of their accounting activities.
The flow of information looks like this:
- Finance Team makes a budget based on last year’s financial statements.
- Church receives donations.
- Church spends money to pay salary, provide programming, go on mission trips, etc.
- Finance Team reviews expenditures and notices there are more expenses than income.
- Finance Team cuts budget.
- Church spends less money.
This is sadly how most Churches operate financially. Instead of planning for the future they spend most of their existence looking over their proverbial shoulder. The common thread among the pastors I work with is that they are trying to use a typical approach to Church accounting to accomplish their vision which is decidedly atypical.
An outsourced accounting relationship can help you create a budget that reflects your Church’s vision and not simply your Church’s financial history. This relationship can provide the knowledge and expertise for your finance team and pastors to make wise decisions on the direction of programming, growth, and staffing. And most importantly from my perspective Churches that outsource their accounting find they spend more time ministering and less time worrying about money.
Has your Church considered outsourcing their accounting?
Is your Church typical or atypical in your accounting practices?
PS. If you are skeptical…just ask 8BIT about how much they like outsourcing their accounting.
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