A Pastor’s Guide To Cash Flow Management

pexels-skitterphoto-9660

One of the things we always see pastors and church leaders struggle with is managing the money in the bank. Many pastors tend to live in the idea of Bank Balance Accounting which everyone can be guilty of from time to time.

Bank balance accounting is that concept of looking at your online banking account, seeing there is money available and then writing the check or swiping the card.

The problem there is that the balance in your online account isn’t telling you the whole story.

While for many cases, the balance is going to be close, in many instances there are outstanding checks waiting to clear or transactions made that have not processed yet. With church, we also throw into the mix that some of those funds may be allocated or designated to other purposes further making the balance inaccurate.

How can a pastor better manage cash flow?

There are in depth accounting and financial strategies that can come into play here but this isn’t meant as an in depth analysis of those concepts. What we’ll detail here are some simple steps that can be put in place to help manage cash flow for your church.

1. Have a Budget

If you have a budget in place, that is well thought out consistently against past trends for spending and income you should have no problem with church cash flow. We write extensively about budgeting on faith while spending on reason as well as many other posts about the topic. Budgeting is crucial for the financial health of a church.

If you’ve not heard it before, I’ll say it again. No one plans to fail, but most of us fail to plan.

A budget is merely a roadmap on how you’ll PLAN to spend the money. It is a good way to steward the church resources so that you can answer to your donors when they ask how the money was handled.

A good budget is more of an art than a science, but there are some ways to get started and some concepts that need to be in place to get started. Stay tuned to a budget planning course we’ll be releasing soon!

2. Get Accurate Reports

Maintaining accurate financial reports for your church is also crucial for managing your church cash flow. These reports start with doing a systematic bank reconciliation of the account. I cannot tell you how many churches we partner with that have gone years without reconciling the account.

Without a bank rec, there is no way to know the accurate balance of the account.

Some will tell me that the church is so small, with so few transactions that there is no need, however, I would contend that when you’re faithful with the small things, you will be entrusted with more. It’s also worth it to your faithful contributors that know that their generosity is being stewarded well.

Our Simplify Church Bookkeeping system is a great partnership for your church so you can rest assured that your finances are being taken care of professionally and accurately.

3. Ask For Help

We have many pastors that come to us and will tell us that they are not very administratively minded. At times, those same pastors are the ones making spending decisions and putting the bank account in jeopardy.

There’s no shame in not knowing how or asking for help.

Sometimes the best solution is to put in place another system with accountability. We’re not saying that the pastor is doing anything wrong, but there are times when there needs to be a system in place to make sure there is money in the bank and we don’t run the balance to a point that could detriment ministry.

Hopefully these steps will help you be a better steward of the resources entrusted to your church. Church finances is one of those required, but often neglected and misunderstood parts of church that we want to help you with.

If you need help managing the cash flow and finances of your church, check out our Simplify Church Bookkeeping system and let one of our Account Managers partner with you in ministry.

Is Your Church Financially Healthy?

We’ll Show You HOW To Find Out And     WHY It Matters In This Free Guide!

It’s time to change the way we talk about giving in church!