While churches devote their time to preaching, teaching, outreach, and other ministry work, the finances take a back seat as it is a challenging and time-consuming task that preachers don’t have time for. However, if you do not manage the financial aspect of your church, you end up spending more and struggling financially.
Keeping track of donations and expenses and following the church’s financing management practices is intimidating if you do not have enough time or the proper training.
To help you stay on top of your budget and expenses, here are five tips to help you.
Revisit your budget
The best way to manage your church’s finances is to create and follow a budget. As per the size of your church and annual donations, you may not have a dedicated staff to oversee the finances and may feel overwhelmed. To get the job done, assess the current state of your finances by reviewing the last three years’ financial statements. When you keep the budget organized, it helps the administration understand how much money the church needs monthly and yearly and save for the future. The more your administration is involved in setting up the church budget, planning, and understanding the financial objectives, the less likely the spending will fall off balance.
Keep track of donations and expenses.
To manage your church’s finances, the best practice is to track how much donation your church receives (revenue) and how much your church spends (expenses). You can keep a tab on this by following how much the average member donates. The best way to do so is by dividing the total donations by the number of people who make donations.
Set up a recurring giving program
Creating and managing a church budget can be trick as there is uncertainty related to monthly giving. One way to overcome this is through online giving platforms that make it easy for church members to set up recurring contributions. There are some superb options available to help improve church finances, and an automated giving program is one of them.
Save for emergency
It’s a good idea for your church to have a financial reserve. As you know, your church will have unexpected expenses, or your church may experience an extended decrease in giving.
Even though there are arguments for and against a church having financial reserves, building a stash of cash for emergencies is a good idea.
According to Christianity Today’s Church Law & Tax Group survey, the average church puts away 2% of its annual cash reserves. So, when you build your cash reserve, aim to save the amount that can cover 3 to 6 months of expenses.
Hire an expert to manage finances
Often, the church’s leader proactively volunteers to tackle the chore of managing the finances, which is commendable but not always required. The best alternative is to hire someone to manage your church’s finances. While this would require you to take out some money from the church’s reserve, it is money well spent as it will free up others for more critical assignments and tasks and will keep you on top of your church’s finances without a thing to worry about.
These are a few tips that will help you manage your church’s finances easily without worrying. If you are looking for expert help, contact Financing Solutions today. They are a BBB A+ and 5-star accredited company that provides a business line of credit to nonprofits, churches, businesses, and FedEx ISPs.