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Any business that works with money needs to manage, count, and spend the money it earns responsibly. That is why churches, like other businesses, hire bookkeepers to maintain their financial records. Church accounting and bookkeeping involve keeping a record of the dates and the amount of all transactions, planning the tax wisely, managing financial affairs, consulting different services, and many more.
A bookkeeper in churches can be a cost-effective solution as they can professionally manage the church bookkeeping to save money in the long run. In this article, we are going to discuss several tips and notes regarding church management, church bookkeeping, and church accounting.
As a bookkeeper in a church, you need to go through several initializing steps to commence the job. You need to find out how things have been done in the church, get to know the staff and the main people in charge, and how the system of the church accounting and bookkeeping is already working. You can follow these steps then:
Commonly, it is one of the primary measures in church bookkeeping to perform a bank reconciliation on the most recent bank statement. You can start doing it immediately, and once everything is on track, do it on a monthly basis. Performing the bank reconciliation allows you to have at least one fixed number in the church accounting matters.
Also, performing the bank reconciliation in the church is an important control function that helps you find out the situation of the church’s cash money currently. In fact, bank reconciliation is one of the basic tasks a bookkeeper should do in a church.
As you already know, churches are considered to be non-profit organizations and are most of the time overflowing with numerous volunteers. For that reason, it might be a little complicated to track the revenues and expenses in a church, compared with other organizations.
As a church accounting and bookkeeping manager, you have to recognize the sources of revenue in the church, which are mostly contributions. Also, you need to know about the flow of money from the collection plate to the bank account. You will not be responsible for the collections, but it is better to know how much is exactly coming in.
In the case of expenses, the church bookkeeping manager should know the person who is responsible for payments. The methods of payment should be clearly explained, and the bookkeeper should know them. Most of the time, expenses are run through a paycheck, but in some cases, they are performed by credit cards or even in cash. The church accounting system should be aware of these methods to find the best solutions to track them.
Although churches are not intended to perform like businesses that make a profit, they still need to be solvent and able to pay for their expenses. Bookkeepers should be able to prepare a monthly report of income and expenses in summary. As a bookkeeper, you need to compare the expenses against the revenues to find out if the church is performing in either a deficit or a surplus.
It is obvious that you must report any critical situation in the finances of the church to the decision-makers of the church, including the pastor. For example, if you see massive deficits in church accounting, that should be an important issue to consider. Then, you should report the findings to the persons in charge of the church to make variations if necessary. Bookkeepers should avoid making changes on their own before getting clear approvals from the decision-makers.
Church accounting is an important discipline on its own. If the church currently has a CPA, you need to be in frequent contact with them as the bookkeeper of the church. Otherwise, it is suggested that you contact a reliable CPA and create an informal relationship with them to help you with the finances from an accounting point of view. This person can be a member of the church too. This matter can enhance your confidence to perform the tasks even better. Keep in mind that you are not allowed to share the financial information of the church with the public, or even with a non-authorized church member.
With the advancement of technology these days, church accounting and bookkeeping are easier than before. There are different bookkeeping and accounting software on the market you can benefit from massively for maximum profitability. The bookkeeping done-for-you service offered by Less Accounting helps the bookkeepers greatly save a huge amount of time, and decreases the possibility of making a tax mistake.
With accounting software like Less Accounting’s services, the business owner is able to focus more deeply on their business, instead of being worried about bookkeeping tasks. Also, it is good to know that Less Accounting offers self-service accounting software too. Use both accounting software and bookkeeping service in your business to boost the efficiency of the system. You can easily reconcile your accounts, have clean books, make your tax filing seamless, track your financial status, and many more with the outsourced bookkeeping service and accounting software that Less Accounting offers.