Planter: You Need to BUDGET—10 Best Practices

Managing money can make or break a new church.

Managing money is an important part of any church and it can make or break a new church. Follow these 10 financial best practices to keep your new church above board financially.

1. The Lead Pastor Does Not Handle the Money

The finances should be set up so the lead pastor does not directly handle the funds of the church. This includes offering collection as well as the ability to withdraw funds or write checks. This practice protects the lead pastor from any possible suspicion of mishandling the funds of the church. During the initial fundraising stage, this can be accomplished in one of two ways: Hire an external bookkeeper or utilize a partner church.

2. Operate From a Budget Approved By the New Church Management Team

Every church should have a budget. Both the income and expenses for a new church must be budgeted. Because of the rapid nature of change in a new church budget, it is advisable to have a quarterly budget approval process. In the case where a management team does not yet exist, the lead planter should submit to the wisdom of a leadership team from a sending church. This measure is also a protection for the lead planter. With a budget approved by an outside team, there is no room for accusation of mishandling the finances.

3. Utilize Two Signers on Bank Accounts

4. Two People Count the Offering

Whenever offering is collected, there should always be two unrelated (familial or business) people counting and signing off on the offering. All cash should be counted and recorded and the record sent to the bookkeeper. This is critical in ensuring that all offering is collected and ultimately reaches the bank. The counting team should have at least three people to ensure that the same two people are not the ones counting the offering week in and week out. A rotation like this creates another layer of accountability and diminishes opportunity.

5. Compare Bank Deposits to the Cash Receipts Records

Each bank deposit should be compared to the cash receipt records recorded from the collection of an offering. This ensures that the monies collected were all deposited in the bank.

6. Adopt a Reimbursement Policy in Accordance With IRS Regulations

7. Record All Financial Transactions in Accounting Software

I recommend QuickBooks Online.

8. Donations Tracked and Acknowledged Through the Church Database

I recommend Church Community Builder.

9. Utilize Online Giving to Set Up Recurring Gifts

Many people conduct a majority of their business through online and mobile payments. A key advantage of online giving is the ability to set up recurring giving. New churches that effectively use online and mobile giving will increase their offering and reach sustainability quicker than those that do not.

10. Conduct an Annual Financial Review

An annual financial review is one of the best deterrents to financial wrongdoing. A review should include the following:

a. Confirm that all best practices are being observed.

b. Test the bank reconciliation to confirm that checks that clear the bank have the same name on them as reflected in QuickBooks.

c. Review some or all of the checks payable to the bookkeeper.

d. Review of receipts for expenses paid to staff members.

e. Review of 12 to 18 (at least one from each month) deposits.

f. Review of three to six bank reconciliations.

Doug Foltz
Doug helps church planters clarify and implement their vision. He stands alongside church planters leveraging 15+ years of church planting experience with over 40 new churches to chart out a path toward realizing the God sized dream of making disciples through church planting.