Church Accounting Software
As a not-for-profit organization, you have a fiscal responsibility to ensure the contributions from your members are spent appropriately and further, that you can provide documentation as to how those funds are spent. Often times churches will rely on volunteers or part time employees to manage the entering of donor contributions or possibly manage the accounting. Larger churches may have an accounting staff that manages these functions. No matter the size of your church, you still need to track the finances for the organization and ensure the dollars donated are going to the right place.
Why purchase a solution geared toward religious organizations?
Oftentimes organizations will look to the shelves of a retail store to purchase an accounting solution but what those organizations don’t realize is that the solutions you see on the shelf are, for the most part, not designed for not-for-profit organizations, let alone churches.
Most churches have a need to segregate their funds. You have a general fund which is used for general organization finances…paying utilities, rent/mortgage, supplies, etc. Maybe you offer Sunday School for the young members of your congregation. Wouldn’t it be great if you could track contributions made by students in Sunday School and then appropriately allocate costs to the Sunday School? You can track supplies purchased specifically for Sunday School used for projects, books, salaries (if applicable), etc.
Churches will often set up separate funds for specific projects. Maybe you need to replace the roof on the church or you are a new church that rents space and want to build your own facility. Having a building fund that specifically tracks contributions made for the purpose of facilities can help you segregate your funds and ensure that you are saving for that new building or that you have a fund available for emergency repairs.
Many churches also have group meetings such as a bible study or hold events outside of regular services that need to be tracked separately from the general fund. Finally, spreading the word of your organization through missions is also important. This means you have volunteers who are traveling locally or globally to preach or provide community services. Often times, the church acts as a pass through for funds collected. Hold special collections during the service or special events that raise funds specific to supporting the mission of the organization. Allocate those dollars to the mission fund and track how those funds are spent.
The overall goal with churches is to reinvest any dollars into the mission of the church. Having the right accounting software will help you automate some of your processes which in turn, reduces the amount of time your staff (or volunteers) spend working accounting and increases the time they spend on faith initiatives such as expanding the churches reach, mission work, community service, etc.
Track Member Contributions and Attendance
At the core of a church accounting system is the ability to track your members. A strong member management system will allow users to enter in weekly contributions by your members. This information is used for a few of purposes:
For most churches, the majority of the income comes from member contributions so tracking those contributions and including those in your financial reporting is critical. A church specific software solution will help you:
- Know how much each member has given on a weekly, monthly, quarterly or annual basis and provide annual giving statements to the members for tax reporting purposes.
- Solicit donations with targeted campaigns. Create campaigns that to encourage smaller donors to contribute more. Target larger donors for capital campaigns or encourage large donors to include the church as a beneficiary when creating their estate plans.
- Know who is attending your services. By tracking contributions, you will have a better understanding of your demographic.
Why not just use a spreadsheet? Seems like a few columns could accomplish what you need? A spreadsheet may work fine to start, however, as you add members and add the weekly contributions that you need to track, that spreadsheet will very quickly become very comprehensive. Utilize a software program that has been designed specifically for tracking of members and member contributions. Avoid bulky spreadsheets and avoid potential spreadsheet mistakes.
The right contribution software will not only track the dollars each member contributes, but it will also help you with identifying groups of members for targeted campaigns. Maybe you want to increase the dollars given by members in the 25-35 age group. You can use the member database to filter out those members and create a targeted campaign to focus on increasing the contributions given by members in this age group. Or maybe you want to create a bible study but want to focus on retirees.
Having a strong donor database will help you better track your members contributions but also track member data to better understand who your membership is.
What kind of church would take attendance? Well, the Pastor, Priest or other leader will not stand at the front of the church and call out everyones name, however, included in the Member Management functionality is attendance tracking. This functionality allows you to analyze your weekly attendance. Analyze trends to see when attendance is increasing/decreasing. What factors are causing attendance to slip or what are you doing as an organization that is causing large increases in the weekly attendance.
In addition to the services, your organization may offer weekly classes during the services for kids. It is important to also track these students to know who is attending, to ensure you have enough staff to educate the students.
Use your volunteers but limit their access
A strong volunteer base is like having a great support system. Volunteers can make or break an organization. Thing about it, churches that have a large volunteer base will have members who are actively involved in the day to day operations. They sit on the church’s board of directors or participate in committees. They participate in service, count contributions and may even provide accounting services free of charge. Whatever their role may be, you want to give them access to your systems, but need to create some user limitations.
The last thing you want is ten volunteers accessing the general ledger system or even looking at the amount contributed by each member. That is why you set-up user restrictions in the software. The right church accounting solutions will allow you to set up user defined restrictions. This allows you to have volunteers enter in membership contributions, print out and mail contribution reports to members. Maybe you have a volunteer that is an accountant and you want to provide them full access to the software to create organizational financial reports, but don’t want them to have access to payables functionality.
Setting up user restrictions gives administrators control over who sees what information while still relying on volunteers to perform much of the work.
Solutions geared to religious organizations can help you better manage your finances, better manage your membership base and reduce administrative costs by utilizing volunteers. Allow us to help you find the best solution with our free search service.