Bookkeeping for Churches: How to Balance Faith and Finances Foundation Group®

You’ll need the bank and other financial statements before you can begin. Donor database collects information like giving history and lets you create groups. Aplos is the only all-in-one software on this list that offers a free trial period, so consider taking advantage of that. More than 750 app integrations, including live, in-house bookkeeping. This is just our site’s SEO section, created specifically for Google and our SEO team, and making it easier to connect with the best people on the planet (that’s you!).

Easy-to-use accounting software for churches

Transparency with your organization’s financial reports is necessary to ensure donor trust and limit IRS audits. 990s help ensure your books are in order, and the more transparent you are with your finances the more donors will trust your church. If you are a larger church with significant staff and budgets, hiring an accountant for a staff position may be a better option.

Payroll

Bookkeepers oversee your church’s payroll, donation, and expense tracking. Although a church is not run as a profit-making business, you still need to balance expenses with income from donations and other sources of revenue to keep the doors open. This accounting software is designed especially for churches and can be easily customized for your church size and the community services you provide. For small to medium-sized churches looking for tools to help you along the journey, a church accounting software designed with your church in mind will make all the difference. A Single Entry Accounting System that uses Cash-based or Fund-based accounting is best for most churches.

If you need more functionality than the core program offers, you can purchase add-ons to handle attendance and check-ins or mass mailings, for an additional cost. The software assumes a basic understanding of double-entry accounting, so the learning curve may be a bit steep for someone with no prior accounting knowledge. Most church leaders are concerned with ministry, not financial management. This means you’ll need to find time and gain the expertise necessary to keep accurate and compliant books. Instead of adding this extra responsibility to your plate, reach out to a professional church bookkeeper. Additionally, church bookkeeping can help you avoid operational mistakes, such as accidentally misappropriating funds.

We recommend that churches and other houses of worship use QuickBooks Online Plus or QuickBooks Advanced so they can get all the tools, tracking, and reporting features we offer. Larger churches with various funding sources should have an accountant on staff. An accountant will help inform your church’s board of all financial changes and requirements. The best way to organize the above-mentioned funds is with fund accounting. Fund accounting helps churches sort income by how it’s collected and used.

Provide your members and donors with up-to-date, accurate financial reports. Prepare contribution statements (AKA Giving Statements) for tax season, but also balance sheets and income statements for regular member financial meetings. By monitoring expenses closely, churches can ensure that monies are used responsibly and according to their mission and priorities, maximizing their impact on the kingdom of God. Regularly review and adjust the budget as needed to ensure effective stewardship of resources.

Quality Bookkeeping for Churches = Leads to Effective Ministry

1. Reconciling your accounts helps catch accounting mistakes and potential fraud.
2. Develop and maintain a comprehensive budget that reflects the church’s mission, goals, and financial responsibilities.
3. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development.
4. From payroll services, to bank connections, to online donation processing, and more, Wave has a variety of features to help you keep your church running smoothly and cost-effectively.
5. Reconciliation is another reason you’ll want to separate financial duties.

Let’s say the $100 tithe from the example above was given by a congregant who wanted their contribution to be used for your children’s ministry program. Fund accounting prompts you to make this distinction as soon as you receive the gift. Fund accounting helps churches show accountability because bookkeepers can break down revenue and expenses into separate funds. In church accounting, you need to list all of your income and expenses. That way, as you record transactions, you can label each transaction to better understand its purpose.

Advanced Service

Fund accounting is a system by which an organization tracks its resource allocation by separating funds into different categories. For example, your church may use a $100 tithe to contribute to your operational costs or a specific program, like your children’s ministry. This method helps to ensure that you use resources wisely and productively across the organization’s operations. Sync your church accounting software with apps that help you communicate with donors and manage contributions with ease. Our church accounting software lets you create and email reports to all necessary stakeholders automatically, so everyone comparable store sales stays in the loop. You’ll also need an accountant to create financial reports and file taxes.