6 Must-Know Tips for Managing Your Church's Finances

6 Must-Know Tips for Managing Your Church's Finances

Posted on February 23, 2021 by

As a pastor or church administrator, do you ever feel overwhelmed by the details of managing your church’s finances? Are you worried that you might forget something or make a mistake? Is the weight of the responsibility of managing your church’s finances heavy on your shoulders?

Chances are, you will say yes to most or all of those questions, but you may also feel that it’s your burden to bear and that you have no choice.

At SBS Accounting & Advisors, we understand that managing your church’s finances can be confusing and complex, but also critical to the church’s financial and operational success.

In this blog post, we discuss six must-know tips for managing your church’s finances.

We must first understand that this is about more than just money; it’s about being a good steward of the resources that God has given you. In order to do that, you must first view it as God’s money, and then adopt his mindset for handling money.

1. Save money. It’s important that you have a safety net built into your church’s finances. This can only happen if you purposely set aside money for the future. As we have seen recently, anything can happen.

At any point, the government can step in and tell you to close your doors, a natural disaster can happen and you can show up with unexpected damage to your property, and, God forbid, your church could split and you lose half of your tithing members. On the flip side, the inverse can occur, where you explode in growth so rapidly that you find yourself needing to expand immediately.

No matter the circumstance, if you don’t prepare in advance, you may find yourself in the unfortunate circumstance of having to cut salaries, lay people off, or perhaps even end up having to borrow large sums of money from the bank with interest.

The easiest way to save money is to build it into your budget.

2. Learn the fundamentals of budgeting. A budget is a wonderful tool that can be used to make sure that you aren’t overspending in some areas and underspending in others. It will also help you to plan for the future. Just as in your own personal life, it’s a good idea to create a budget for the church.

A budget in its simplest form is a statement that you will not exceed spending a certain amount in a specific area of ministry for the budget year. This can be expanded by adding multiple line-items within a ministry to further track what is being spent and how.

A budget will help you not overspend within an area, while also helping you expand other areas. For example, as you tighten the financial reigns on one area, you can free up resources to fund another area.

It’s always a good idea to build a little cushion into your budget, so that you don’t exceed what you bring in for the year and so that you can save a little and set it aside for whatever may come in the future.

As simple as budgeting is, it’s not possible if you do not keep track of your donations and expenses.

3. Keep track of donations/expenses. If you are not currently doing this, I can’t stress it enough – please start doing this now! When it comes to taxes, you must have a record of what you are bringing in and what you are spending.

There is plenty of great software on the market to help you with this. For example, we can help customize the Chart of Accounts in QuickBooks Online to ensure you’re properly keeping track of donations.

If you are already doing this, then you know how it can help you plan for the future. Obviously, in ministry, we can’t become expectant of donations, as they are reliant upon the fortune of others and their own spiritual walk with the Lord. But, keeping track of donations – aside from the legal ramifications – will also help you to plan future budgets. And, tracking expenses, as explained in tip #2, will help you to manage what is being spent and aid you in your effort to not overspend and to save money.

No matter how you look at this, managing the church’s finances is a weighty responsibility, and we want to encourage you to be transparent with those on your leadership team.

4. Offer transparency with your leadership team. The Bible teaches us this in Proverbs 11: “Where no council is, the people fall: but in the multitude of counselors, there is safety.”

Transparency with your leadership offers you several benefits. First, you now have accountability. All too often, people in leadership and authority of finances fall prey to the temptation of cheating the system. The best way to combat this is to offer accountability. Not only does this prevent those in charge of the finances from doing something they shouldn’t do, but it also gives the church members comfort in knowing that there are other people checking on the finances and making sure that everything is being handled above board.

Second, you now have access to more wisdom and knowledge. As questions about finances arise, you now have a resource pool to ask questions and seek answers from. These leaders can aid you in your search for the right way to handle whatever financial decisions may come your way.

Third, you’re no longer the only person responsible. This means that if questions arise about any decisions that were made, there are now others who can answer those questions, too. You no longer have to be the only person with the answers.

No matter how many people are involved in helping make financial decisions, one of the best rules you could ever follow is to make sure to have thoroughly vetted every decision. Never make a decision based on an assumption.

5. Don’t make financial decisions based on assumptions. There’s a common saying associated with making assumptions … don’t worry, I won’t repeat it here. But, suffice it to say, doing so tends to leave the people who made the assumption not look so good.

When dealing with the overwhelming decisions of your finances, it can be tempting to move forward on a hunch, or because of an assumption of what the future might hold. But, as mentioned, this is God’s money, and we need to handle it with care and in the way that he would handle it.

Because God is not the author of confusion, we should seek clarity before making a decision. It may take extra time, but vetting out a decision is always the best course of action. I am not saying that you need to remove faith from the matter of finances. Nothing in life is certain, aside from death, taxes, and the return of Christ, so there will always be an element of faith in making a decision. But, what I am saying is that when there is an answer to be found, go find it before making the decision.

Doing this, along with the other tips I have shared in this blog, will result in you and your church’s finances being handled with integrity.

6. Operate with integrity. Our witness and our integrity is important to God. How we conduct ourselves, and how we handle the tasks we have been given here on earth, is important to God. This is true for handling his money here on earth, too.

Operating with integrity is not only pleasing to the Lord, but also pleasing to those you are serving at your church. We must remember that while the church’s finances belong to the Lord, they were supplied by the members of the church. They have given it to the Lord and are asking you to steward it wisely. When you operate with integrity, you are pleasing the Lord and giving confidence to those who gave in the first place.

Even when you have adopted the mindset of God for handling his finances, it’s important to remember that you’re still operating within man’s system here on earth. And, in America, there’s a lot of laws that you can get tangled up with. That’s where we come in.

Ready to Take Control of Your Church’s Finances? We’re Here to Help!

At SBS, we would love to speak with you and discuss how we can help you and your church serve God and use his finances legally. We want to come along side of you and aid you, as you walk through the legality of the financial system, with the goal of serving God and spreading the work of his ministry.

If this interests you, please don’t hesitate to contact us today.

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