A Powerful Tactic For Your Church

By Kevin Camon

Read Time: 3 Minutes

Any organization that deals with money, registered as a for-profit, nonprofit, church, or ministry, should consider hiring an outsourced bookkeeper. 

The responsibility of a bookkeeper is to maintain the financial records of the church that includes income and expense records. They are supposed to keep records of the dates and amount of every transaction, tax planning, financial planning, and consulting services of the church. Bookkeepers keep track of all accounts and are the ones who verify the accuracy of the procedures used in the accounting processes. 

Having a bookkeeper on staff to maintain your financial records will open the door for a less stressful approach when it comes to leading your congregation. While a church doesn't need to hire a bookkeeper to take care of its financial records, there are several ways a church can benefit by hiring one.

Why consider outsourcing? 

For some churches, having an outsourced bookkeeper can increase expertise & accuracy, lower bookkeeping costs, and provide a missing link in internal controls. Let's take a look at these one-by-one:

INTERNAL CONTROLS are a key area where churches are at risk. Having someone outside of the financial system reconciling your bank accounts, tracking, and verifying your deposits and checks means there is a second set of eyes going over all of your systems, increasing the safeguarding of your congregation's resources.

ACCURACY and expertise are critical for good financial health in any church. Having a trained and qualified bookkeeper means having an expert who knows the right way to make entries, understands and complies with local and federal requirements, and ensures your reporting is accurate.

THE COST of having someone on staff for bookkeeping in a small church often means combining the role with another role to make the job enticing enough. For other churches, it means hiring someone part-time who may not have a great deal of experience. Yet, for many others, it means asking a volunteer treasurer to maintain the accounting. Hiring someone who is trained and does bookkeeping for many churches means they can give you higher quality work at an affordable price.

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In addition, here are six benefits that will have you on the right track to having peace about your organization's finances.

1. Unbiased financial opinion 

Having an external bookkeeper can do wonders for your ministry. Internal bookkeepers often get emotionally involved in the church or ministry. By hiring an outsourced bookkeeper, like the ones at StartCHURCH, you can receive crucial insight into your church's financial situation. It may be positive or negative insight, but either way, it is valuable information you'll need to make necessary adjustments and make decisions that will help your ministry grow.

2. Compliance benefits 

 Good records will help you monitor your church's progress, prepare your financial statements, identify sources of income, keep track of deductible expenses, keep track of your basis in the property, prepare your tax returns, and support items reported on your tax returns. Compliance with nonprofit tax laws is a must. When it comes to paying income taxes, payroll taxes, workers' compensation, and the like, your bookkeeper will prepare the right documentation and provide the forms needed to ensure that your organization is in perfect IRS compliance. You will have less stress about your bookkeeping records if you find yourself facing an IRS audit.

3. Accurate financial statements

Your bookkeeper understands accounting and knows how to prepare your financial reports. These documents contain information you need to record in your books. The reports include all purchases, sales, payroll, assets, liabilities, and any other transactions you have in your church. Financial statements are recommended for every church, but since the format and frequency will vary based on your church's size, an experienced bookkeeper can prepare your financials using generally accepted accounting principles, otherwise known as GAAP.

4. Curb tax liabilities 

Without proper training and experience, it's easy to file federal tax returns improperly, which can prove a costly tax liability for your church. The good news here is that with your 501c3 status, your church is exempt from paying federal income taxes; however, other taxes may apply. Tax laws are complex, from payroll taxes to excess benefit transactions, to failure to report taxable benefits, reasonable compensation, housing allowances, and more. They require experience to make tax compliance a priority. Bookkeepers know what to look for regarding your ministry or church's tax liabilities.

5. Protecting your financial assets

Your church's bookkeeper is responsible and accountable for all finances, reducing mistakes, oversights, and even fraud as any misappropriation of church money will be immediately recognized. Your assets will be tracked and depreciated, reducing any book inflation.

6. Loan qualification

Whether you're expanding a new church ministry or planning for a church building, we all know that big dreams come with hefty price tags. Having a bookkeeper helps you maintain accountability and enables you to secure a loan or grant. To present a clear picture of your church's financial status and ensure the lender can see exponential growth in your organization, your professionally prepared financial statements can look impressive to any lender considering your loan.

Bookkeepers that Care

If you're ready to experience the freedom of letting someone else take on your financial management so you can focus on your ministry, we're here to help! With StartCHURCH Bookkeeping, you'll gain the care and expertise of your own personal bookkeeping team at an affordable cost. We'd love to speak to you today to learn your specific needs and see how we can serve you. Please give us a call at 877-494-4655, or click the link below to learn more about our bookkeeping service!

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