Whether you like it or not, your church must deal with finances.
As the church pastor, you don’t have a choice, you are at the center of your church’s financial management system. It may be easier on you if you have a large church with extensive staff. However, the burden is more difficult to carry if you have a smaller church with fewer or no staff.
Gaining an understanding of the church finance best practices improves your church’s financial health. If you handle your church finances properly, you increase your chances of reaching more people and having a greater societal impact. We will show you six important church finance best practices that pastors should know in this post.
Church Finance Best Practices for Pastors
Seek Financial Intelligence
An important obligation of Christian leaders and pastors is to seek financial intelligence. There are two important reasons for this. The first is that finances and leadership have a strong connection. If you have poor financial habits, it is impossible to handle your church’s finances efficiently.
The second reason is that money is important to your church and every member of your congregation. To improve your financial management intelligence and ability, you understand personal financial issues like:
- Interest rates
- Types of debt
- Credit cards
How does money come into your church? Most times, churches receive income through offerings, tithes, gifts, donations, and contributions. Such income could come from checks, cash, text giving, or online giving.
Every pastor should set a system in place to track their church income. An easy way to do this is by making use of a church management software like ChurchPad. Such apps help you know how much comes in and where they are coming from. With this information, you can tell what months of the year you have your highest income. This way, you can plan for the future with more ease.
Draw up a Yearly Budget
A budget is a spending plan based on your current and future revenue and expenditure. When you draw up a budget for your church, it helps you keep your expenses in check and your savings on track. Running your church without a yearly budget is setting yourself up for financial failure. Once your church fails financially, it is only a matter of time before the failure extends to other facets of the church.
A good place to begin is to speak with departmental leaders and ask them to prepare budgets for the year. They should base their budgets on departmental goals, resources, and needs. you might need to provide training sessions to help them.
Offer Online Giving Solutions
If your church doesn’t already make use of digital donation and text giving, you should start immediately. Providing online giving solutions increases giving by up to 32% according to several studies.
People prefer to send in their seeds and donations with convenience especially when the platform is secure. You can employ a ChMS like ChurchPad for this purpose. Apps like this make it possible for the givers to track their donations and download yearly statements. They also help to simplify the process of drawing up financial reports for your finance team.
Set up Protocol to Protect Integrity
Anybody can fall into the trap of financial misappropriation with proper supervision and protocol. It doesn’t matter whether they are in the church or not, people will face this temptation. You can save them from falling and protect the integrity of your church by setting up specific finance protocols.
Some of the things that you can do include:
- Limiting access to church bank account information.
- Requiring dual signatures.
- Coordinating external audits.
- Ensuring that more than one individual is assigned to dealing with cash at any point in time.
- Reconciling ledgers.
- Encouraging volunteer rotation.
If you have a large church, you can remove senior church leaders from dealing with finances directly. Taking all these measures helps to protect your church’s financial integrity.
Set up an Emergency Fund
Church leaders and pastors must be aware that we will sometimes face unexpected situations. It doesn’t matter how much planning and budgeting you do, there will always be unanticipated expenses. As such, financial experts suggest that you set up an emergency fund to cover the expenses of between three to six months.
In taking this step, you must figure out what constitutes an emergency so that you protect the funds from non-emergency spending. We advise that you strive to increase the amount you save in this fund per year.
Church financial management shouldn’t be as difficult as we make it. We have stated six church best finance practices for pastors in this post. Which ones do you use currently and what are the results? Share with us in the comments section. Don’t forget to check out the features of ChurchPad to help improve your church administration and financial management.