4 Keys to Manage Your Church Budget in a Crisis

church budget planning

One of these two things are true.  
 
You’ve seen a shift in your giving amounts over the last few weeks. You haven’t seen a shift in your giving amounts, but you need a plan for the potential economic recession that is coming. 

The fact is that the unemployment rate across the country is at an all-time high. A huge percentage of businesses, business owners and employees have been affected by this pandemic and we will see how those numbers play out for the economy over the next several months. This is why – regardless of what giving at your church looks like today – you need to have a plan for how you will handle a potential financial impact to your church.  
 
Here are four keys to help you analyze and manage your budget in a time of crisis:  

Have a good understanding of what your numbers look like 

With any roadmap, unless you have a good understanding of where you’re currently at, you’ll have a really hard time coming up with a route that gets you to your destination. The same is true for your church budget.

In order to make smart budget decisions, you really need to have a good understanding of your current situation. This includes knowing your current numbers, trends and balances.  If you don’t know your financial numbers, you really don’t know your church. 

 Yes, I will admit that there are some guys that focus too much on numbers and completely miss their mission. But what we see more often is the reverse – pastors that have lots of big ideas and passion, but just guess when it comes to church finances.

Without keeping a pulse on the financial health of your church, there is no way to make wise financial decisions, plan for the future, or determine how and where you can actually save the church money. Knowing your numbers is simply good stewardship.  

What does this look like practically?  

If you’re a Simplify Church Bookkeeping partner, this part is easy. Just by looking at the monthly reports we send you, you should have a good handle on how your church is doing financially. Additionally, your account manager is available to provide you more detailed information, answer questions and alert you to potential problem areas. We can also generate year-to-date (YTD) reports to help you better understand the story your numbers are telling. Using this service can save you lots of valuable time and effort!

Okay, but what if you’re trying to manage things yourself? Well the most important report you need to analyze is your Statement of Accounts (Profit and Loss) Report. This will show you in detail what you took in last month and what you spent.  Some financial software solutions also offer the ability to match those numbers against your budget, so you can see how that your actual expenses are trending against your budgeted plan. 

You will want to review these reports for the last couple months, as well as look at your YTD trend. If you budget on a calendar year, you can look at the amounts from your first quarter as well. Obviously a lot has changed in the past several weeks as far as giving and income goes, but you want to understand what your expenses and income looked like before the crisis, so you can begin tracking any changes to that trend. Ask yourself, “What story are these numbers trying to tell me?

Analyze your critical expenses  

There is a very real chance that giving and income will go down for your church, either now or in the coming months. The good news is that without meeting physically, there are quite a few operational costs that should go down as well.  

Renters: If your meeting space is no longer open to public gatherings, you may be able to save on some rent expenses. Contact your landlord to discuss your options. 

Property Owners: If you own your building, you can keep the thermostat down and not heat or cool the worship center. 

Maybe you provide snacks, donuts and coffee during Sunday morning worship. While probably not a huge expense line in your budget, this is one place you can save a few dollars when cash flow gets tight. 

Go through your expenses line-by-line and see what you do not need or any expenses/services that can easily be cut out. Perhaps you have some subscriptions to a service that you aren’t really using. 

This is the time to determine which church budget expenses are critical and which ones are nice-to-haves. Understanding your critical expenses will help you analyze where savings can be found in your church budget. 

Things like payroll, insurance, and other fixed ministry costs will be much more difficult to cut during this time. If you haven’t already applied for the Payroll Protection Program to help offset payroll costs, watch this video to see if this might be a good option for your church.  (Yes, I know the funding ran out…but more funding will hopefully be available soon).

Pro Tip: if you own and have a mortgage on your building talk to your bank. They may have options available to you to help offset your payment during difficult times. Many banks offer interest only payments to churches during slow giving times.  Remember, you never know until you ask. 

Call your congregation to generosity 

Talking about generosity is one of those areas many pastors shy away from. Now is not the time to neglect talking about generosity. In fact, it is a disservice to both your people and your organization if you don’t talk about generosity in this season.  
 
It is much easier for us all to prioritize giving in seasons of abundance. Prioritizing giving to God in seasons of uncertainty and turmoil requires more faith and trust, but often leads to more opportunities to experience God’s faithfulness along with greater freedom and joy.  

Remind people each week how they can give – via online giving, text to give, or by mailing a payment to your church. You can also make it easy for people to drop off payments if you don’t have online giving options. Let people know that you have setup a convenient drop box to drop off their tithe payments.   

If you haven’t yet set up online giving at your church, now is the time to get started. And once people set up recurring giving, it makes it simple for them to continue to give generously (and it makes it much easier to predict your monthly income). Setting up online giving is quick and easy to do, especially if you use a system like Simplify Give. 

Beyond explaining the various ways to give, part of the discussion needs to be a reminder of why giving is crucial to the church, especially during a time when you’re not meeting together corporately. Explain how the funds are being used and how the church still is able to continue to function and to meet tangible needs through the generous donations of members.  

For a more in-depth discussion of this topic, we’ve put together a comprehensive guide on How to Talk About Giving & Create a Culture of Generosity in your church. You can access your FREE copy here. 

Prepare a church emergency budget 

Once you’ve analyzed your numbers and you know where things are at, it’s time to put together an emergency or contingency budget that will help you navigate through the next few months.   

  • What purchases were you planning to make in the next few months? Can any of those be delayed? 
  • Which expenses will help you move your church forward during this digital season?  
  • Which expenses are not serving your church right now? 

As you evaluate your expenses, think through you church vision/mission and strategic goals. Which expenses will help your church continue to grow? Which items fund your growth engines? Do you need to reevaluate any of your growth engines or goals?  

If you’re not sure why I’m bringing up the topic of growth engines and goals, check out this post on the seven “deadly sins” of church budgeting (and what to do about them) or this post on church budgeting 101.  

Now put your emergency budget together.  This is your financial plan to help your church not only survive this crisis, but to be ready for what comes next. You may never experience a dip in giving, but now you have a plan in place. As I’ve said many times, a budget is just a plan. But it’s an important one.  
 
It is fear of the unknown and uncertainty that breeds stress. When you put a plan in place, you relieve stress and better position yourself and your church to ministry to people during this very uncertain time.  

Look to the future 

In this season, many people are feeling confused and afraid. What better way for the church to show up than as people who are not operating out of fear, but out of faith and as good stewards of the resources God has given them. When your church has a solid financial foundation, you can focus your time and energy on being a light and a beacon of hope in this season.  

Not only that, you can position your church for whatever comes next. We don’t know when this season will end. What we do know is that once the guidelines on social distancing relax, there will be great need, but also an open door of opportunity. Will you be a church prepared to lead and serve and love through recovery and revitalization? Or will your church be focused on recovery yourself?  

Here’s another question: Do you want to figure this all out on your own? Or do you want to partner with a team of church financial experts to help you manage your church finances and plan for the days ahead?  

Our done-for-you payroll, bookkeeping and online giving services will take the financial burden off your shoulders and give you peace of mind. If you’re not confident in your numbers or you’re wasting valuable time trying to figure it all out, schedule you free consultation call today.  

Because this is also true: Taking time to make wise strategic and financial decisions now will help you navigate the days, weeks and months to come.  

Can a Church Show a Profit?

It’s the end of the year. You sent out an end-of-year giving letter and your congregation responded. 

Suddenly you have more money than you anticipated having. But then you worry: 

  • Is this a bad thing to have excess funds at the end of the year?  
  • Do I need to run out and spend it immediately? 
  • What should I do with this money? 
  • Will we lose our nonprofit status? 

You can breathe a sigh of relief. You’re not about to lose your status.  

There are four big questions that churches frequently ask about end-of-year finances. What most churches want to know is: 

  • Can we have a surplus of money at the end of the year? 
  • Should we aim to have a surplus at the end of the year? 
  • How much of a surplus should we aim for? 
  • What should we do with that surplus? 

When we say surplus, what we’re really talking about is the amount of money a church has after all donations and income have been accounted for, and after all expenses have been subtracted. In accounting terms, this is either a “profit” or a “loss.” 

Terminology is important here, since churches are not-for-profit organizations. As a not-for-profit, there are strict legal guidelines and laws that must be followed. Therefore, we need to be careful with the term “profit.” In this case, the more accurate term would be “net proceeds.” 

Let’s address each of these questions in order. 

Q1. Is it okay to have a surplus of money at the end of the year? 

The short answer is yes. Just because you’re a church doesn’t necessarily mean you can’t show a “profit” at the end of the year. 

A nonprofit can make a profit.  

But there are limits to what you can do with that profit. 

Your not-for-profit status impacts what you can do with the money that is left over. It ultimately it comes down to the purpose of your organization. 

A traditional for-profit organization makes money for its owners or shareholders. Profit is usually distributed to shareholders or put back into the business. 

On the other hand, a not-for-profit must have a “public or charitable” purpose. This means any end-of-year surplus should be used for a public or charitable purpose. 

What does this mean for you? As a church, you cannot distribute that money in any way to shareholders, investors or other people that may have a stake in the church.  

Pro tip: Just don’t give that money to individuals in any way at the end of the year. 

Q2. Should we plan to have money left over at the end of the year? 

You should absolutely have money in the bank at the end of the year. That is simply being a good steward of the resources God has given your church. Plus, it just makes smart financial sense.  

You want a financial cushion to prepare for the unexpected. This could be an unexpected expense, a downturn in giving or simply an unexpected opportunity. 

Q3. How much should a church plan to have left over after all expenses have been paid?

 The quick answer is it depends. 

There is no one-size-fits-all answer to this question. We’ve seen churches approach this question in a variety of ways. 

Some organizations take a very conservative budgeting approach. They intentionally plan to spend less than they anticipate they will receive in a given year.  

Other organizations budget based on what they received in the previous year. They then take whatever excess they receive from growth and allocate that money at the end of the year. 

Still others plan for an end-of-year giving campaign that they hope will bring the organization surplus at the end of the year. 

 I’ll give some more thoughts on this in a moment, but first, let’s discuss the last question. 

Q4. What should we do with this money? 

The answer to this question is also, it depends. Some churches allocate this surplus for specific needs within the church, some use it to establish savings and some use it to fund future ministry growth.   

Our advice is to strike a balance between savings and ministry. It’s always a good idea to save for a rainy day. In church life, you never know what the next week, month or even what tomorrow may bring. It’s fiscally responsible to have some margin in your accounts that allows for flexibility and financial security in the organization. 

It’s also good stewardship, however, to be able to distribute those funds to missions, local ministries or other ministry needs of the church. Does your church need some new equipment that perhaps you’ve been putting off? Does your facility need updates or improvements? Are you able to bring on some staff support or outsource some work that is causing you additional stress? 

However you choose to allocate these funds, the bigger point is that having a surplus at year end puts your church in a position where these decisions can be made. It gives you options. 

Let’s return for a moment to the previous question of how much to put aside. 

While it’s true that the exact amount depends on the circumstances of your church, there are a few principles that can guide us in this discussion. 

We’d contend that having too much left over at the end of the year means that you didn’t fully invest into your full ministry potential. Ultimately it comes back to the foundation of stewardship. We are called as churches to be wise stewards of the resources that God has entrusted to us.   

Stewardship involves both saving and investing. Good stewardship means that we’re using the resources to expand the mission of our church. It also means that we’re not putting our organization in a financially untenable position.  

If you want to learn more about how you can better steward of the resources God has provided your church, or you simply want to gain a better understanding of how to effectively manage church finances, sign up to receive free church finance, administration and growth tips delivered right to your inbox.  

If you’re ready to take the next step of taking the burden of managing your church finances off your plate, then let’s schedule a time to chat! We’ll show you how having a done-for-you financial management and accounting solution can help you and your church thrive! 

Church Budgeting 101

How to set up and audit your church budget

For many church leaders, the thought of building out a church budget can feel overwhelming. Maybe your church doesn’t currently have a budget. Perhaps you’re preparing to launch a new church plant or build a new building. Or maybe you just aren’t confident that your current church budget is working for you.

The good news is that building a church budget doesn’t have to be complicated. A budget is nothing more than a guide: A roadmap to how the church will allocate the resources they have been entrusted with in the upcoming year. In the next few minutes, I’ll walk you through the basics of building a church budget.

Why your church needs a budget

Once you learn how to create and maintain a budget that works for your church, you’ll discover that it’s an indespensible part of your ministry.

Don’t believe me? Here are a few things a well-defined budget can do for your church:

  • Answer questions about the mission and vision of your church
  • Set clear direction on how money will be spent and where the priorities of the church reside
  • Provide a filter for making spending decisions that may come up throughout the year
  • Offer a measure and benchmark to track the financial health of the organization
  • Set a standard to reflect and review throughout the year to make future ministry decisions

Getting started: Types of budgets

Most churches build a budget in one of two ways: 

  • Zero-based budgeting – What goes in, goes out

With this concept, you plan to spend everything you receive. Developing a budget is as simple as making an income projection, and then making a plan to spend the money that is received. 

  • P&L Budgeting – Plan to lose or plan to gain

Since we’re talking about churches, we can’t really talk in the true business sense of “profit and loss.” However, we can talk about planning for a loss or planning for a gain in a given year. Just because a church balance statement shows an excess (profit) at the end of the year, doesn’t mean the church is no longer a non-profit entity

Note: The danger with P&L budgeting is planning for a loss without a plan to cover. You can lose money on paper and still have cash flow. You might have money in reserves, investments, etc. However, you should always be aware of how much you are spending. Remember, a budget is NOT the same thing as a balance sheet. 

Budgeting basics: Income

The easiest way to start building your budget is to look at projected income. What sources are bringing you money? This includes tithes and offerings, but it could also interest, investments, facility rentals, dues, donations, etc. Once you’ve determined all your income sources, set a projected amount for each source. 

Are you on a growth track? If your organization has been around for a few years, hopefully you have some historical data to look at. Is your income trending up, down or staying stagnant?  

PRO TIP: If you haven’t jumped on board with mobile giving, now is the time. This is by far the easiest way to increase your income. According to Nonprofitssource (2018), “Churches that accept tithing online increase overall donations by 32%”

Budgeting basics: Expenses

Now that you’ve projected your income for the year, let’s look at common expenses. As I stated earlier, a budget can be as simple or as complicated as you want to make it. As your ministry develops and grows, the number of expense categories will also grow. 

Especially if you’re just starting out, it can be helpful to think about things in terms of “buckets.” What is the mission of your church? How can that mission be broken out into broad categories or “expense buckets”?

For this simple exercise, let’s start with three “buckets”:

GROW (Inside Church)

  • Ministries (children, youth, adults, worship, etc.)

GO (Outside Church)

  • Local Outreach (evangelism, events, etc.)
  • Missions 

OPERATIONS 

  • Personnel (salaries, benefits, etc.)
  • Administration (operating expenses)
  • Facilities and Equipment (maintenance, utilities, insurance, etc.)

Once you’ve established your categories, do your best to fill in projected expenses. Again, any historical date you have will help a ton here. 

Now what?

Now compare your projected income with your projected expenses. Do they match? Are there categories that need to be adjusted?

Now ask yourself the following questions:

  • Does the budget reflect the church’s priorities?
  • Are there areas where spending needs to be increased? Decreased?
  •  How does this budget align with the church’s growth goals?

Use these questions as a guide to make any necessary adjustments to your budget.

Ask for help when you need it

This is building a church budget in a nutshell. You can absolutely do it. But there are ways to maximize the effectiveness of your budget to help you grow a healthy church. And if budgeting isn’t you’re thing, it’s okay to ask for help. 

Here are a few ways to get the help you need:

  • Download our free 10-step Church Budgeting Checklist. Whether you’re putting together a budget for the first time, or simply looking to improve your budget, this will give you prompts to think through as you create your budget. 
  • If church finances aren’t you’re thing, we’re here to help. Our done-for-you church bookkeeping service will take away the guesswork and overwhelm out of managing your church finances properly. Get accurate monthly reports delivered straight to your inbox and peace of mind that you’re not making a costly financial mistake. Schedule a free demo today

7 “Deadly Sins” of Church Budgeting (And How to Avoid Them)

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I recently read a statistic that said roughly half the churches in America spend a percentage of their income on debt retirement each year. In all honesty, it’s not hard to believe. But imagine with me, just for a moment, the impact our churches could have if they weren’t burdened by debt. 

While we most likely won’t remedy church debt in the near future, what we can do is talk about the importance of budgeting for churches. Especially if your church is one that spends a percentage of its income paying down debt, it’s imperative that the church is making wise spending decisions with the money that has been entrusted to it. I’ve compiled a list of seven church budgeting mistakes I see churches make on a regular basis.

1. You don’t have a budget

I am amazed at how many churches I consult with that don’t have a budget. I mean I get it. Finances aren’t always fun. But a comprehensive budget is crucial for the next step of growth in your ministry. It provides a filter for making spending decisions that come up throughout the year and it provides a measure and benchmark to track the financial health of the church. 

A budget doesn’t have to be complicated. It is simply a plan for how to use the money provided by the faithful gifts of church attendees. It provides a filter for making spending decisions that come up throughout the year and it provides a measure and benchmark to track the financial health of the church.

2. You don’t have someone responsible for building/tracking your budget

It is one thing to say you need a budget. But who actually puts the budget together? Is it something that you put off doing because it falls outside of your zone of expertise? 

You don’t have to be the one to put together the budget if finances aren’t you’re thing, but you need to have a plan for who will do it. It could be a treasurer or bookkeeper, it could be a finance committee, it could be a staff member or your elder team. The important thing is to designate someone(s) and make sure he/she/they have what they need to build an annual budget.

3. Your budget isn’t consistent with your mission & vision

In churches, it’s easy to spend money. There are many “good” ministry activities to support. But how do you know the money you’re spending is the BEST use of funds?

The only way is to budget for expenses based off your vision. Ask yourself, “Does this expense help us accomplish ______________ (insert your vision statement here)?”

4. You don’t have an accurate picture of where your church is at financially

Too many churches have no idea of the current financial situation. Maybe they haven’t completed their monthly bank reconciliations. Or they are using an outdated system to try to manage their financials. 

One of the best indicators of how you are spending and allocating your spending for your ministry is to look back at historical patterns.

Review this past year as a profit and loss statement. It will show you what you took in (income) and what you spent (expenses). How does it compare to what you budgeted? How is your giving for this year compare to last year? Are you on a growth or decline trend in your giving? When you know these numbers, you can make better ministry decisions. 

5. You don’t know your ministry growth engines

What are those things in your ministry that are producing “growth?” I don’t just mean numerical growth, although in many cases, numbers paint an accurate picture of the healthy of a ministry. What are those things that you are doing to successfully reach people? What is bringing people to the church? What is helping people grow spiritually?

Consider investing more in areas that contribute to growth, and strongly review those areas where you are spending money, but that may not be producing growth.

6. You’re not using your budget as a ministry tool

If you have a budget, but you don’t use it to make decisions, you aren’t utilizing your budget as well as you should. Anything that can be measured can be tracked. The key here is to not become focused on the numbers, but to use them to make better decisions. Are there areas you need to focus on, or areas where you need to re-think how you’re allocating funds? Here are some questions to consider: 

  • Are things going according to plan? Do we need to make any adjustments to our spending?
  • What ministry areas do we want to focus on in the upcoming year?
  • Are new ministry opportunities opening to us?
  • What’s changing in our community that we need to be aware of and prepare for?

7. You don’t have a plan to make it better

Can you relate to any of these “sins?” If so, I get it. A lot of pastors don’t love finances. And that’s okay.

But the biggest mistake a church can make?

Not having a plan to make it better.

In the church world, most of us don’t have everything figured out. But the key to growth – both as an individual and as an organization – is to have a plan for improvement.

Do you have a plan for improvement?

Here are three steps you can take to start improving the financial health of your church:

1. Get clear on your church’s priorities

  • What is your mission and vision?
  • What are your priorities for the coming year?
  • What are your ministry growth engines?

2. Know your numbers

  • Review your profit & loss statements
  • Look at current and projected spending
  • Know your average monthly giving trends

3. Get expert guidance

If you can relate with any of the statements above and you want to set your church up for success, then we’re here to help.

We’ve created the “Perfect Church Budgeting Checklist” to help you walk through this process.

DOWNLOAD CHECKLIST

We’ll also be dropping a FREE mini-course AND webinar next month to teach you how to create a vision-centered church budget that can be used to make better ministry decisions and grow your church. Let us know if you want us to save you a spot! 

With a well-prepared budget that is reviewed consistently, your church will have a plan in place that positions it to become a healthy, thriving church.

A Pastor’s Guide To Cash Flow Management

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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.

Four Dangers of Designated Giving

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If you’ve been around church long enough you’ve for sure heard about designated giving. Like many things it is one of those areas where hear-say and old stories have skewed how and why churches have designated gifts.  If we’re not careful, we can run into many of the dangers of designated giving and it will distract us from our main mission, reaching the lost.

Similarly, many churches that have been around for any amount of time over a few years may have designated gifts that no one currently really knows what they are for.

While the IRS make it pretty clear how not for profits should handle designated gifts, and they also provide info on the types of designations gifts can have, we’ll focus more on the dangers designated giving can have for your church.

Now, before I get run out of town, there are some instances where designated giving is acceptable. After we talk about the dangers, we can discuss where it may be appropriate.

Designated Giving Danger #1

Your church can be designated broke!

There are types of designations that donors can place on their funds, but one thing remains the same, if the donor has designated their gift, it CANNOT be used for anything else.

You can see the danger here, if a donor designates money towards something; let’s say, flowers for the pulpit, and you have no desire to put flowers on the pulpit, then you’re kind of out of luck with that bank balance.

We have churches that have been around for a long time that have old designated funds where they’re not really sure what the original intent of the fund was. In some cases, the donors and people who set it up are either gone from the church or deceased, so there’s really no way to find out. In any case, that money is tied up by designation.

The only way to get designated money undesignated is by approval of the donor.

Designated Giving Danger #2

Your church is setup for ministry silos

Designated giving is also a killer of church unity.

When people are able to designate their giving, it opens the door for people to dictate their ideas through their giving.

Let’s say pastor that someone in the church gets upset with something you said or a way you handled a certain situation. It wasn’t bad enough for them to leave the church, but just out of spite, they’re going to show their dissatisfaction by donating their tithes now to the youth department.

While in some ways that may not seem bad, heck, the youth need money too, it still reveals a huge issue with church health.

If people can dictate through their giving, it’s a sign of an unhealthy church.

Designated Giving Danger #3

It can distract from your mission

As humans, it’s easy for us to get distracted by the shiny object syndrome.

In churches, the same thing occurs. We start with a defined mission and vision with a clear pathway. Over time, as things grow, more people get involved and we get busier that vision and path can get blurry and distracted.

Now throw new leaders into the mix that get going. Even the strongest leaders pointing the organization in the right direction can have trouble keeping everyone on the same path. As things keep moving along, distractions happen and side roads creep in.

Sometimes, these side roads seem harmless, just a short-term project but if not handled correctly these will distract from the main goal. Over time, these small distractions become bigger and cause confusion and lack of clarity for the organization.

How does designated giving relate here?

Simple, let’s say one of your leaders comes to you with a need in your community. At first that sounds great and probably something we should do. At first, it’s going great and as intended. However, over time, if not kept in check this little side project can get legs of its own and overwhelm your main mission and vision.

Designated Giving Danger #4

It creates unnecessary accounting complexity

This one may seem weird to say as a Church Bookkeeping and Accounting company but its reality. Designated giving sets your church up for undo complexity in your accounting. This also relates back to the previous point as the complexity increases, you can get distracted from your mission.

Churches really have two ways to manage designated funds, and both are fine to do. Some will keep the funds in one bank account and just account for the differences in their software while others create a completely separate bank account to keep the funds distinguished.

Either way is completely acceptable, but both have their inherent dangers.

The first is dangerous because if you have people doing Bank Balance Accounting, they may see the balance of the account and think the church is financially healthy. What they may not realize is that some of that money is tied up for a specific purpose (designation).

The second gets dangerous because now you are adding bank transfers into the mix. Money gets counted and deposited into one account and transferred, or it can get deposited into each. Either way, it gets more complex depending on your method for retrieving that money out of the account(s) to be used.

Here’s the reality.

Our mission is to reach our communities with the good news of Jesus. When we add complexity to secondary issues, it takes away bandwidth to focus on our primary mission.

As an outsourced church bookkeeping company, we’re happy to help manage designated funds, and be that partner, but we’ll also consult about these dangers. Personally, I have not found a reason making designated funds worth the hassle.

Here are a couple solutions for avoiding these dangers of designated giving.

The first will take some courage. The next time someone wants to give with a designation, kindly tell them that the church has a policy of not accepting designated gifts, but they are more than welcome to give to the general offering.

In many cases, you’ll find the donor has no issues with that. Sometimes, they’re giving to designated areas just because that’s what they’ve always done and no one has said anything different.

Secondly, adopt a Kingdom Funding Approach to your church’s budget.

In a Kingdom Funding Approach, you’re in many ways accomplishing the same things as you could with designated giving, but doing so in a healthy manner through good budgeting stewardship.

In KFA, you handle any designations through the budget process. If you want to start a building project, setup a line in your budget for that. If you want to give to missions, put it in the budget as either a percentage or set amount. If the church needs new windows or roof repair, you see where I’m going.

If your budget has proper allocations and is managed correctly, there will be no need for designated funds.

Designated funds are a big issue in many churches and getting away from them will not be an overnight process, especially in an established congregation that has become accustomed to them. However, your ministry will thrive by removing these dangers and unnecessary complexities.

4 Keys to Manage Church Spending

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One of the biggest questions we get from churches looking for our help revolves around how to control church spending.

Like any organization, things are easy to control when only one or a few people are involved. Once growth starts to occur and more people get involved, it becomes significantly more complicated to hold the reigns. Add to this a growing, scaling ministry and it’s no wonder why keeping track of church spending quickly becomes overwhelming.

As churches grow, often this issue creeps up on the pastor and church leadership. That first ministry leader hired needs to run to Wal-Mart to get some supplies. Pastor gives them the church debit card and they go. This process gets repeated but now the next leaders are given debit cards for their own ministry area. Before long, too many people have access to spend the money and without proper financial controls, your church’s spending will be out of control.

At first, you may be tempted to just curb all spending and put a lock down on the finances of the church. While that will definitely curb spending, it will also frustrate your leaders, disenfranchise your volunteers and stifle your ministry growth.

The key to managing church spending is to implement a system I can define as Flexible Control.

There is definitely a balance to your system and what you put in place to manage spending, while empowering your volunteers and key ministry leaders to serve.

Here are a few ideas on how to put effective spending systems in place.

1. Have a Budget in Place

I’ve written several postings about the importance of a church budget and how to start a church budget. We’ll be releasing a Church Budget Builder Online Course in September that will help guide you through the budget building process.

Before we can get to building a budget, we must have an understanding about what a budget is and what it can do for your church.

A budget is nothing more than a guide; a roadmap to how the church will allocate the resources they have been entrusted with in the upcoming year. As a plan, the budget needs to be flexible, while at the same time providing enough concrete direction to help manage the resources in place.

But how does a budget help manage spending?

It’s actually quite simple. With a budget in place, with well defined ministry area budgeted amounts, your ministry workers have their “guardrails” when it comes to their ministry. A ministry leader in your children’s ministry can know exactly how much has been allocated for them to use to do ministry for the upcoming month or year.

Now, does that mean they can just go out and spend it all in one place?

Absolutely not, we’ll get into more keys later but this is the first step.

This is also an area where you as a pastor or key ministry leader can show leadership. While you empower your ministry area leaders to be able to make spending decisions, you are also providing a level of control as to how much gets spent.

It’s also important as the leader of the church to share about stewardship. There is so much that can be said here about budgeting that an entire post can (and has) been written but for now we’ll just leave it that for your church to manage spending, you need a budget in place.

FOR YOUR CHURCH TO MANAGE SPENDING, YOU NEED A BUDGET IN PLACE

2. Develop an Atmosphere of Stewardship

Somehow over the years churches have become known as cheap. The word stewardship has become synonymous with cheap. For some reason, there’s a belief that churches shouldn’t spend money for things and opt to ask for free or handouts.

Now I’ll agree that churches should not spend frivolously and there are many things that churches and church leaders spend money on that may cause others to think differently about their decision making abilities but that is all the more reason to develop an atmosphere of stewardship.

What is an atmosphere of stewardship?

As a pastor, you are responsible for the spiritual direction of the church. It is your vision guided by God that is helping people on their journey of discipleship.

An atmosphere of stewardship is a culture where everyone in the church knows that spending decisions are handled wisely. When you are seen making wise spending decisions, your key leaders and volunteers will understand that is a key value and it should trickle down to them.

NOTE: if it doesn’t, then you may need to use that as a reason to find a new ministry leader.

Spending wisely doesn’t mean being cheap. Think of it as an investment. Even if something is expensive, what does that do for the future of your ministry? Is that an investment in people’s lives? Can that purchase or expense better build the Kingdom.

Think parable of the talents.

God has entrusted your ministry with resources to be used, are you burying those resources in the sand or are you investing it to yield dividends for the Master? This is also a great place to speak into your ministry leaders that may have a slant towards being cheap or trying to do things for free. I’ve already written about the ministry cost of free and the true costs of free.

An atmosphere of stewardship encourages everyone to think through spending decisions and be wise stewards of the church’s resources.

3. Put spending guidelines in place

Ok, let’s get real practical here.

One super simple way to control ministry spending is to put spending guidelines in place. This goes back to the key of having Flexible Control over your finances. They goal here is to put in enough controls while maintaining a level of flexibility to let ministry happen.

Depending on your church’s budget the amounts may differ but let’s put it into perspective with some real numbers.

Let’s use a church with 2 Full Time pastors, 1 Part Time Ministry Assistant, and 4 key ministry volunteer leaders. This church has a budget of about $300,000 just for perspective with your ministry. For simple math, let’s break this down and say outside of fixed expenses (payroll, utilities, insurance, rent or mortgage and missions) we have about $90,000 left for ministry.

If you’d like to see how we came up with those figures, consider our Church Budget Builder Course

$90k gives us about $7,500 per month for ministry uses. As we break our budget down further and further, the amounts get pretty tight.

That $7,500 per month is to be used divided up by the ministry areas. To continue the simplicity of our example, let’s say our Children’s ministry has $1,000 per month BUDGETED to spend. (notice the emphasis on the word budgeted!)

As pastor, your job is to empower your Children’s Ministry leader to be a steward of that $1,000/month. What does that look like practically?

Within a strong financial accounting system (see point 4), you give your CM leader the freedom to spend up to $1,000 per month. Now, do they have the authority to spend that all at once? That is a question for you and your leadership. That will also depend on that person’s personal ability to manage the stewardship of that amount.

Here’s what I’d recommend.

Your Children’s Ministry Leader can spend up to $200 without needing further approval (the budget gave approval) on any expenditure. If the expense is going to exceed $200, encourage them to ask you about the purchase.

AND NO, this does not need to go to approval by committee or business meeting!!!

You as the pastor should have the authority to permit spending within the parameters of the budget. If it’s something you’re not comfortable with making the decision alone, email another elder or leader and ask for their second opinion. However, the approval to the Children’s Ministry Leader should not take more than a couple of hours.

Again, I could go on and on here, but with an atmosphere of stewardship and simple spending guidelines in place, this should not be an issue.

4. Have a robust, scalable accounting system

As I began this post, I mentioned that out of control spending is one of the top things pastors ask me about. In many cases, spending is out of control because no one is in control. No one is in charge.

Pastor wants to pawn the financial management off to the treasurer or bookkeeper, treasurer or bookkeeper is already stretched to the max just handling the data input and your elders are wanting to see the key financial reports to know the giving trends for the previous month.

With all that going on, it’s no wonder why many churches feel they are out of control with spending.

Let me suggest something real quick. With our Simplify Church Bookkeeping System, we empower your church and leaders to make decisions with the information, not spend time worrying about how to categorize that last receipt in Quickbooks.

I won’t spend too much time here in a shameless plug but a system like Simplify Church will help you gain control of spending because we’ll come alongside and partner with your church to manage your finances. With your assigned Account Manager, we can stand in your corner to help put spending systems in place.

Conclusion

I’ll admit I could have written for several more hours on this topic and probably will in the future. I could break down each key into its own post but for now we’ll leave this overview here.

Managing the resources God has entrusted to your church is a key step in stewardship and leadership. As you become faithful with the little things, God will continue to increase the amount He sends your way to steward. Managing the spending of your church is as much a spiritual discipline as anything else and should be something you strive to be the best at as a pastor.

I’m curious, what have you put in place with your church to manage church spending?  Comment below and we’ll discuss.

3 Simple Steps to Prepare for Summer Church Giving Slumps

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Believe it or not, Summer is right around the corner. Spring is here bringing sunshine, outdoor activities, green grass and allergies.

For churches, summer times means an increase in children’s and student ministry opportunities since kids are out of school. Unfortunately, it also brings family vacations and a significant decrease in church giving. We all know that there is a slump of summer church giving.

I’ve written previously about how to prepare for the Summer giving lull but here is a quick read on a few simple steps you can take now.

Here are three simple setups you can take now to be ahead of the summer giving lull.

1. Analyze expenses

Get your last couple bank statements. Are there expenses that were let’s say… less than necessary? I’m not here to question anything, but it’s a good place to start.

For many pastors, taking people out to lunch or dinner has become the norm. Perhaps reduce that frequency or opt for coffee instead.

Are there any subscriptions you pay that are not necessary? Anything you can save will help get over the giving shortage.

Most churches are very frugal to begin with so this may not be a big area but it’s worth considering.

2. Avoid or Put Off Big Purchases, Renovations

I’m reading a book currently where the author is talking about tracking expenses and finding ways to save for your company. One story he expressed was when riding with a business partner in the car.

His first day in town, there were some electrical things in the office that weren’t pressing but could be fixed. As they passed the hardware store he asked his partner if they should stop in and get the parts. The response from his business partner was “We’ll wait until tomorrow.”

Tomorrow came and as they passed the same hardware store he got the same response.

On his last day in town, 5 days later, and after they’d passed that same hardware store with the same response he couldn’t take it anymore and had to ask. He wondered why his partner kept putting off the stop. His partners response was something we could all put to practice.

His business partner replied and told him it was a game he was playing with himself. Since the fix was not dire, or dangerous, he kept passing the store saying the same thing to see how many days he could live without making the purchase. The longer he went, the less important making that minor fix became and he saved that small amount of money.

What areas in your ministry can you “wait until tomorrow”?

We’re all guilty of falling victim to the tyranny of the urgency or wanting the new shiny stuff now. I have to check myself on this almost daily.

Can you find 3 or 4 things that you could challenge yourself to wait until tomorrow?

3. Communicate With Your Church

Giving is one of those areas that make pastors sweat.

I get it, talking about money has become a taboo subject in our society and the church has definitely received a bad rep for that.

As pastor, this is just an area where you need to step up and lead.

Giving is one of those areas of spiritual development that is often the biggest hurdle for growth in our relationship with Christ. As pastors, we need to be the encourager.

I’ve already written in several areas on this topic and I think we can already agree on the importance of the giving talk (perhaps begrudgingly by some )

But as we come into summer, it’s important to express so that people know the importance of their continued faithfulness. Most people sitting in the pews won’t realize that summer is a slow giving time for churches.

Be open and honest to let people know that while you realize that vacations and other expenses are pressing for the paychecks, it is crucial that people remain faithful.

Talk about it, it will go a long way.

What are your suggestions? What things have you put into place to prepare for the summer giving lull?

Comment below so we can all benefit from your ideas.

4 Financial Areas Where Pastor Needs To Be In Charge

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There are times where I really enjoy “stirring the pot.” Usually with my in-laws in a joking way, for some reason I enjoy taking areas that people stress about and stoking the fire.

In church life there a few subjects that tend to get the fires burning as well and many of them revolve around areas of church we help with which is the finances.

As a pastor and leader of a business designed specifically to help churches in these hot button areas I for sure have heard a number of discussions when it comes to the pastor and the church finances. This topic for some reason is one of those that people will stake their stance and stand firm.

While there may be some that continue to disagree, let me detail some areas where pastor needs to be involved in the decision and analysis process.

Here are 4 financial areas that pastors need to be in charge (or at least know what’s going on)

1. Budget Planning Process for the year

The pastor needs to be a key leader in the budget planning process. We speak with too many pastors that don’t know their budget, can’t explain why certain items exist or don’t know why certain lines have certain amounts.

Now some will use the budget as an easy way to say no and that can be a useful tactic, however, far too many just don’t know the details.

Your church’s budget has a very specific prominence for your organization. While it is not set in stone, nor is it law, it’s definitely a guiding document when it comes to spending and ministry decisions. Give it too much weight and it will hinder your progress, not enough and you will be talking about how to shut down the ministry. There is a healthy balance in managing the budget. We’ve written a post here about why your church needs a budget and here on how to start that budget planning process.

There is no excuse for a pastor to be subordinate to a finance committee.

A healthy budget process is led by the Pastor and Elders, then up to the finance team to work within that guidance to allocate the amounts and make the budget work. The pastor has to have ownership of the budget and the process that went into creating it.

2. Final approval or at least input in hiring decisions

For most, if not all pastors, they are the figure head of their local church. Even if the constitution of the church says otherwise many people will assume the pastor is in charge. Unfortunately, this puts many pastors in a tough position where the assumption doesn’t match reality.

One area that many average church goers may assume is that the pastor is “chief of staff” or quite simply, The Boss. They will assume that pastor also has a say in personnel decisions.

Because this assumption exists, its important that pastor has a say in hiring decisions. The senior pastor needs to at least be in the process of interviewing and making a decision in hiring new personnel. Without pastor’s input, it puts him in a very difficult position when decisions need to be made or when problems arise within the staff.

3. Monthly Reports and Analysis

One of the biggest things we’ve learned over the years of having our business is that pastor’s eyes will glaze over when we start talking about financial reports.

The ones that don’t glaze over usually have two different reactions. There are some that believe that pastor has no business knowing about the finances of the church, then there is the others that are scared of going to jail because the church may be doing something wrong.

While I’m not going to get in the debate about whether or not pastors should know the finances (because I believe wholeheartedly that they should!), I will contend that pastors should at the very least have some idea of what is going on with the financial health of the church.

Pastor needs to know certain metrics and stats that relate to the current status of the church.

We’ll talk more in depth on giving in the next point so in this section we’ll just discuss the overall finances of the church to include overall income and expenses. Pastors need to be the leader when it comes to how the church is stewarding the finances of the church.

What does it mean to be a good steward?

When I started in ministry I am so thankful that I worked for a tightwad pastor (a term I use as endearingly as possible). I am a spender; money definitely burns a hole in my pocket. If I have cash, its very easy for me to swing by the gas station for a Scooby snack or swing through a drive thru.

Having people in my life to help hold me accountable or at least to look up to makes that a little better as I’ve matured.

As I was tasked with managing the budget in my first ministry assignment, the pastor challenged me to consider everything in worst case scenarios. We handled the budget as if we’d go weeks without any additional income. To do this, we took all total budget amounts and planned on spending at 80%.

While there were some things I could contend that were hindered in the ministry by doing this, for the most part it was very effective as we usually had surplus at the end of the year. We basically used the old Fable of being diligent to store up for winter so that we’d not starve.

As pastor, you should be keenly aware of how the money is being spent in your ministry. In the next section we’ll discuss how to watch the income, but just as important is to watch spending.

There is a very fine line between empowering your ministry leaders and micro-managing spending, but it’s important that you keep tabs on spending.

What does that look like?

For starters, when you’re planning the year and budget, express your vision for spending. Consider sharing the 80% rule with your ministry leaders. Secondly, give them an amount they can spend without additional authorization so they are empowered to make ministry decisions (this amount may be the 80%, hint, hint!) But keep an eye on that spending. Know what your ministry leaders are spending in an on-going basis and track that against the budget.

For our Simplify Church Bookkeeping Clients, this is a report we provide every month where we break down your income and expenses by ministry area, but also show you how those amounts are trending against your budget.

We know many pastors get nervous when we start talking about money and others just really don’t know where to start so we try to simplify things and give a very simple and easy to read analysis on a monthly basis of where your church stands.

4. Giving Trends

Another contentious subject for pastors and finances is keeping track of giving. If you want to start a big debate in a room full of pastors just ask the question about whether or not the pastor should know the giving information.

While we won’t debate that specifically here, there are ways that pastor can know what is going on without having to get into individual details.

Pastors need to be aware of the general giving in their church. They need to know the total for the week. They should also be aware of the amount of giving per unit and how that is trending over time. Both of these numbers can be evaluated without the pastor knowing any information on individual givers.

To analyze the weekly total, pastors should consider a few things. Once the total is counted, we need to look at the amount for this week which is pretty obvious. That amount should be then analyzed a number of ways. Let’s look at the giving over the past 10 weeks.

Why 10?

If we look at 10 weeks it allows us to see trends while removing months that might have 5 Sundays. That fifth Sunday can skew month by month analysis so taking the ten weeks into account gives a better measure. Ten week analysis also allows for seasonal trends to be taken into account. Depending on how those ten weeks are laid out, you may have a few high weeks mixed in with traditionally low weeks. Depending on big employers and their payroll schedule in your area that might also weigh in to how the giving trend looks.

For instance, our church is in a military community. Because we have a large contingent of military families in our church, we know which weeks of the month will be larger giving amounts than the others. You may also be in a community where many of your givers work for the same employer and experience the same result.

When analyzing the ten weeks, try to choose a consistent 10 weeks year over year. This will allow you to see trends as your church grows over time and provide a comparison to see how things are growing in your ministry.

Giving Per Unit

This measure takes into account an average gift amount of those people attending your church. You can analyze two numbers here but the best benchmark of giving health is to look at your total amount of giving divided by your attendance (minus kids) for that week.

If you want to get even more general, take this number of your total giving divided by your average attendance.

Keeping an eye on this number will give you a range to understand the giving health of your church. While there are no hard fast numbers here, some trends have been analyzed over time to determine some good averages. According to Tony Morgan and his post about “Measuing Church Health”, an average per capita giving number they’ve analyzed working with lots of churches is $41.

What does that mean?

Basically, a healthy church can expect to receive $41 for every person that attends their church on average.

Now, that measure will be dependent on several factors of your ministry and won’t hold true for everyone. For Example, if you’re reaching a lot of lost people that have never been around church before, that number for your church may be way lower since they may not be as aware as a young Christian about tithing.

However, you can use that number as a gauge to track over time. A good practice is to look at that number each week and month to see how your giving is trending. As total income changes this number will ebb and flow accordingly.

For pastors keeping an eye on giving trends, they will be in a position to understand what is happening in their church and possibly proactively catch upcoming changes before they happen.

The Procrastinating Pastors Guide to Annual Church Budget Planning

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We published last week the 3 Reasons Your Church Needs an Annual Budget and had some good responses from pastors that agreed, but wondered what were those next steps to getting their annual budget planned.

Today, we’ll give you 6 steps to Annual Church Budget Planning started. From these simple steps, you’ll have most of the framework in place to have an Annual Church Budget you can use for your ministry.

Step 1 – Review Last Year’s Church Budget

One of the best indicators of how you are spending and allocating your spending for your ministry is to look back at the historical patterns. Review this past year as a Profit and Loss statement. It will show you what you took in (income) and what you spent (expenses).

Look for any patterns. Also, look for any areas that have bigger numbers. When you look at yearly spending as a whole, over the entire period of time, you may get some surprises that you didn’t expect once things are put into perspective. Often, we’ll have churches that don’t realize what seemed like a small amount they were spending weekly, when added up over the year actually becomes a bigger percentage of budget than they expected.

Use these findings to decide if there are areas you need to focus or re-think how you’re allocating funds.
“Be honest here. If you’re spending $100 a week on donuts, and throwing out 2-3 dozen every week, it may be time to analyze or help your donut buyer plan better!”

Step 2 – Project your church year end financial

Ok, now we’re going to get into the nitty gritty of planning.

Since we’re not quite complete with the year, we’ll need to do some projecting of how things will end. The good news is if you’re reading this post in late November when it is published, we only have a few weeks left of the year so the projection will not be too hard. However, since you may be reading this at another time, we’ll show you a quick way to project.

Take your YTD Profit and Loss report for your church. This should show you what has been recorded as income and expenses so far this year. If you’re using Quickbooks, or hopefully our Simplify Church Bookkeeping System, this report will be pretty easy to produce.

If you can, export that report to Excel.

Once you have it in Excel, create a formula as follows =SUM (Col # / # of months in report) * 12. It will end up looking something like this: = SUM(B2/11) * 12

On the cell with your formula, grab the little square at the bottom right of the cell. Click and hold as you pull down so that you are highlighting all the way to the last row of the report. This is a quick way to duplicate the Excel formula you just made for all the rows.

What did we just produce?

This new column will be your End of Year projection on how you will finish the year. From this information, you can now start to project your Church Budget for the new year.

Step 3 – Analyze Year End and Plan the New Year

This is where the real planning begins.

Use the information you just produced and begin to think through your next year. I would re-color or highlight any numbers that are going to stay the same in the next year. This may be things like Rent, Subscriptions, Fees and other expenses that you are committed to or are vital to your ministry that you already know you will use in the next year.

PRO TIP : Add numbers into a third column in Excel so you have:
Column 1 – Real numbers produced from your Church Accounting Software
Column 2 – Projection from the equation you created in Step 2
Column 3 – Numbers we’ll enter as we create the next year’s Annual Church Budget

As you review line by line, think about those expenses that made up the numbers. Do they seem high? How does that line contribute to your ministry? Does that expense help you fulfill the Mission and Vision for your church?

Think through the spending of each line with those questions as a filter and use that to analyze what you’ve done so far.

As you complete your review, use Column 3 to put your final numbers for the next year’s church budget.

Step 4 – Get input from your ministry leadership team and key ministry leaders

Once you have a draft of the budget, which should be completed now in Column 3, share it with your ministry leaders. Get their input and thoughts.

If you have a staff, this is a good time to get their input into their ministry area and their plans for the new year. If we had more time, or had started this sooner, we could have had them draft their ministry area and then plan accordingly. Since we’re at crunch time, we can give each leader a primer for their decisions, and let them have input into the process.

Have a discussion with each leader about their area. Ask the same questions you considered in your preparation for the spending in their ministry area. The key here is to accept their input and get “buy in” from them. Let them feel a part of the process and understand why we have a budget, and how important good financial stewardship is to the success of the ministry.

If there are any adjustments that come up here in those discussions, adjust your budget at this point so you have a good, prepared final draft to present for approval.

Step 5 – Begin the preparations necessary to finalize and approve your annual church budget

If your church by-laws or constitution requires it, this is a good time to start scheduling whatever meeting is going to be appropriate for a vote on accepting this as the budget for your ministry.

It may also be required that a draft of the budget is required to have out for review to your membership as well. Get this information out soon as well so that people can be well informed. Having a well-planned and thoughtful budgeting process can help to alleviate some of the unnecessary headaches and drama that so often plagues ministries in this process.

Step 6 – Review the Church Budget Monthly and Quarterly in the New Year

Now that we’ve spent the time to prepare the budget, let’s really put on ministry on fire and use that planning throughout the year.

Each month or at least each quarter, do a review of your income and expenses against your budget.

PRO TIP: Simplify Church Bookkeeping clients get this report each month for a quick and easy review!

As you move throughout the new year, you will now have a financial road map for your church. You will find ministry decisions become easier (from a financial standpoint anyway) as you are able to look at things and plan against you expected annual church budget.

Hopefully you get a chance to start your budgeting process now. I’ve been in your shoes before and know as a pastor you wear many hats. If you’re like most, those hats that seem daunting, or you’re not exactly sure how to complete are the ones that get put on the back burner.

The steps I laid out here can be completed in just an hour or so. The analysis part make take a bit longer but it will only take a short time to get there. If you need some help, advice on your budget or want to get this off your plate completely by using our Simplify Church Bookkeeping System, Schedule a demo today.

Hey! We’re offering a webinar on Wednesday December 7, 2016 where we will go through these steps and I’ll show you exactly the steps I go through to create church budgets. If you’re interested, Register Here!