Blog

5 Tips for Church Leaders to Manage Money Wisely

Houses of worship don't look all that busy when congregations aren't pouring into the doors on the weekends. But during the week, staff and volunteers are often hard at work planning missions and fundraising events or running summer camps, schools and daycare programs. How can you be sure you have secure management of payments and expense reimbursements for all of these diverse activities?

Here are five tips from financial and nonprofit experts on managing expenses and improving record-keeping.

1) Document financial policies

When drafting your financial policies, include everything from how much people can spend on airfare and hotels for church-related business, to who signs checks and counts cash at events. By spelling out the rules, you'll make life easier not only for current staff and volunteers, but also for future leaders. When people have a clear budget you reduce the chance that they will spend too much money.

2) Segregate accounting responsibilities

If someone is recording assets, the same person should not make the bank deposit," says Janet Ramey, principal of CPA firm Brown Smith Wallace. Along the same lines, signers of checks should not be the same people who deposit the checks. This helps reduce mistakes, as well as temptation for someone to misappropriate funds.

3) Establish rules for expense approvals

To maintain control over expenses, especially when you're dealing with volunteers, it's best to explain clearly who approves expenses and how people request reimbursement. For example, you can require that expenditures over a certain amount must have approval from the church board or accountant. “It might not be efficient to create purchase orders for any purchase over $100, for example, but setting the limit at $250 can help you manage costs," says John Lipp, principal of nonprofit specialist Lipp Consultants.

PEX can help eliminate the administrative tasks associated with expense reimbursement, allowing church leaders to simply load a prepaid expense card with pre-set funding amounts and limit where card users can spend the money. Covenant Life Church in Gaithersburg, Md., uses this approach for its overseas missions, so travelers don't have to use their own cash or credit cards.

4) Adopt online payment tools

Instead of dealing in unwieldy cash payments, give your congregation the option to pay with credit or debit cards. Parishioners can pay online via services like PayPal, and both PayPal and Square allow you to process payments with a tablet or phone in-person at events. Not only will you reduce all that cash handling, you'll have instant records of how much you raised and where the money came from.

5) Create safeguards for collecting cash

Even if you reduce the amount of cash being handled, there will always be a certain amount that changes hands, especially during collection-plate passing or at events. "Ask at least two people to count cash and verify amounts," suggests Ronny Mitchell, audit manager for accounting and tax advisory firm CohnReznick LLP. If cash needs to be stored before it goes to the bank, use vaults or safes that require two keys to open, and distribute the keys separately to church leaders.

See how you can help eliminate checks petty cash and reimbursements from church financial operations. 



Christine Kent brings over 20 years of writing and journalism expertise to her work for technology, consumer and corporate organizations. Her journalism-driven approach enables her to not just write a document, but to find the voice of a client to tell their story in the most compelling way.

Stay informed with our monthly newsletter!

Loading...

Thank You

Get the latest