5 Core Essentials in Church Finance
Published in INSIGHT - Fall 2017
By Rick Cadden, CCA, CCBA
Church business administrators wear so many hats covering so many diverse departments, it can be a real challenge to balance it all. There are only so many hours in the day and sometimes it just does not get done. Daily “to do” lists can be created but with so many areas demanding his time, the church administrator can be distracted and not catch the important core essentials that keep the business of the church operating with smoothness. Here are five core essentials every church administrator must perform in providing excellence in church finance.
1.Transparency in Financials
The church business administrator must develop a sense of transparency to the church so that everything is visible to all. This does not mean you must show every person every part of the church financials. Presenting transparency to the church at large will eventually build trust and most will not even care to see it all, knowing that everything is in order. State that you have an open-door policy and anyone at any time can see the church financials. Obviously, you must first have all the financials in order to present transparency. Be intentional in becoming transparent. Start by reporting key numbers that the church needs to know to ensure them the finances are in order.
2.Relevant Reporting
Research and find what the church wants to see each month and then report it in a timely manner. Look for stats that have meaning and that show the direction the church is headed, even if it is decline. Pull together a summary dashboard report that gives the state of the church financially and operationally that is easy to read and understand. Include items like giving, attendance, special fund giving, cash flow, income/expense, emergency fund balance, and other statistics pertinent to the church. Include statistics from all areas of church business administration at some point in reporting.
3.Annual Inspection
Do not rely on your own judgement or that of a committee that everything is in order financially and operationally. Use the services of a third party to inspect your work every year. There are different levels of inspection like compilation, review, and audit. Depending on the church’s situation, choose one of those levels. For example, if the church is debt-financed, the bank may require an audit. Conducting an annual inspection further enhances your transparency and further builds the trust of the congregants. Make the results of the inspection available to leadership and the church if so desired.
4.Promotion of Giving
Do not assume every person knows how to give to the church. With the tech age, ways to give not only expanded but also got complicated for many donors. If the church uses state-of-the-art giving like Text to Give, make sure there are instructions easily accessible for those first-time users. Remind the church congregants about how to give and include it as a regular part of church promotions. With any special giving emphasis, include the ways to give with the presentation.
5.Trends and Forecasting
This core ties the other core essentials together. Using meaningful metrics in church administration is key. Track everything in church finance using that information to build useful metrics that give the church a wide-angle view. Tracking will build the trends needed to see where the church has been, where they are currently, and where they are headed, financially speaking. Forecasting is not predicting the future. It simply gives the church a picture of where the church may be headed. Include in your tracking statistics items like per capita, average monthly giving, budget history, and attendance.
By Rick Cadden CCA, CCBA
Associate Administrator, First Baptist Marble Falls, Texas
Speaker and Trainer in Church Business Administration