Some may think houses of worship are busy only when they see congregations pouring into the doors on the weekends. However, 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, be sure to include everything from how much cardholders 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 overspend.
2) Divide 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) Adopt an expense management platform
With an expense management platform, you can access and manage funds 24/7, wherever you are, making it easier to track expenses and quickly adapt to the needs of your staff and volunteers. Instead of dealing with unwieldy cash payments, give your congregation the ease and flexibility to pay with a prepaid card. Prepaid cards are flexible, and you can easily add or remove funds from cards.
4) 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.
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. You should always have at least two people count cash and verify amounts. 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.
The PEX Visa® Prepaid Card 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 cardholders can spend the money. Covenant Life Church in Gaithersburg, Md., is one of the many congregations that uses the PEX platform for its overseas missions, helping employees and volunteers to make purchases while maintaining accountability and control. See how you can help eliminate checks petty cash and reimbursements from church financial operations.