Solving Everyday Parish Finance Issues

church finance

 

When we talk church accounting, we might think of the monthly heating bill, managing the lease on the old convent, or managing payroll for your office full of staff members. Of course, major financial plans are often overseen by the parish or finance council. But what about the day-to-day parish finances? The reimbursement check requests, the religious education fund, or the receipt collection? These little day-to-day tasks can add up to big problems if managed poorly. Today, we’re taking a look at four potential day-to-day problems in your parish finances and ways to solve them.

 

Tracking Spending & Reimbursement

Problem: Beyond the big ticket items each month, expenses trickle out for every cause under the sun. Punch and cookies for first Communion. Fresh flowers for the spring landscaping. Printing glossy brochures for the marriage enrichment retreat. To make matters more complicated, many purchases — especially for ministries — are made by volunteers. Your youth minister can’t give her credit card to the small group leader picking up chips and soda for a youth night!

 

 Solution: Provide volunteers and ministry leaders with prepaid cards when they’re paying a small expense. Register the cards so you have access to the line of purchases. This allows you to both limit and oversee spending without the hassle of reimbursement paperwork and delayed checks.

 

 

 Tracking Fund-Specific Donations

Problem: Many donation aggregates only let you deposit money into a single account. However, many parishes use fund accounting. If a donor earmarks money for a specific cause — say the youth group or the church hall expansion — extra steps are added to both the communication and accounting processes. If online donations can only be deposited to a single account or fund, a specific designation field must be created … and parishioners must remember to select it! An additional burden is born by the accounts manager, who must manually transfer or earmark the money to each specific fund.

 

Solution: When selecting an online giving platform, consider one that includes direct deposit to multiple funds.

 

Internal Controls to Prevent Fraud

Problem: Checks and balances are necessary to protect church funds. With multiple staff members and leaders having access to credit cards, prepaid cards, or petty cash, fraud is a real possibility. Imagine a long-suffering parish volunteer. Money is tight at home due to very real, trying circumstances. After hours of “free” work organizing and leading a ministry, the person might feel justified in “borrowing” some cash off the top from the chili fundraiser. The scenario meets all the categories of the fraud triangle  — the motive to commit fraud, the opportunity to do so, and the ability to rationalize. Opportunities like this abound in parishes, where “business” might be conducted more like a casual mom-and-pop shop than a corporation with stiff oversight policies.

 

Solution: Oversight by impartial parties is key — someone who doesn’t stand to benefit from the payroll. A member of the finance council with an accounting background or an outside firm can act as another pair of eyes on your books overall. Even in smaller instances — like the chili fundraiser — having more than one person checking the numbers is important.

 

Sticking to the Budget

Problem: Equipment breaks, expected costs arise, and fundraisers don’t make as much as originally anticipated. Staying on budget can be challenging! While most parishes have policies in place for larger purchase approvals, the little things can still add up.

 

Solution: Not everyone possess a knack for keeping money organized, but that doesn’t need to hurt your parish bottom line. Schedule regular financial meetings for anyone on your staff with a budget. This can help ensure that everything is on track for the year as well as help address potential problems more quickly as they arise.

 

Parish life is about far, far more than money. But prudent and measured financial management ensures that you can be sharing the good news for years to come!

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