While most religious institutions are non-profits, they still require money for electrical bills, operational and building costs, employee salaries and utilities, to name a few examples. Additionally, religious groups are often sending volunteers, aid or monetary donations to crisis areas or local philanthropies.
It’s important that religious institutions have the proper resources to manage all of this cash flow out, as well as cash flow in from donations and member tithing. Churches don’t provide typical goods or services like a retail store or restaurant, and it can be easy to think they don’t require the same meticulous accounting processes. Truthfully, religious establishments need a thorough understanding of their income and spending just as much as the next company.
There are many factors to consider when choosing an accounting software for a religious institution. Here are various church accounting solutions, and the pros and cons of each.
Accounting software can be sorted according to company size served. A small-business accounting solution may be useful for smaller religious communities. This benefits institutions that want help tracking donations and fundraising efforts, but also aren’t making yearly donations in millions of dollars.
Use a small-business accounting software when you want the tool tailored uniquely to your congregation size or to your projected income or donations.
Church management software is the common reference for a genre of solutions that helps organize and manage operations for churches, cathedrals, mosques, temples, synagogues and other religious buildings. Church management tools can be used to contact and keep up with members and provide a digital community for a physical congregation.
Church management solutions will sometimes have built-in accounting or finance features. These features allow administrators to keep track of money flow within the same platform they track other metrics such as attendance. These features may be less robust than a straight accounting tool; while accounting tools have more features overall, church management solutions with accounting features can be used for organization and documentation if nothing else.
Use a church management solution when you want to perform accounting tasks in tandem with other managing duties.
It might come as a surprise, but some accounting tools are designed specifically for churches and other religious institutions. These software tools function how your finances function. Instead of sales accounts or retail sales, they operate in terms of ministries and contributions. This helps religious institutions understand their money in greater, more specific detail.
These tools, as well as those previously mentioned, can be used to create informational reports. Certain tools will integrate with a religious institution’s bank, and they may include payroll features that account for employee salary and reimbursements. Use a church accounting solution when you want your metrics to be more closely related to the kind of “business” you’re performing.
Regular accounting solutions don’t have to be ruled out as a potential solution for religious institutions. Generic accounting tools will have fully fleshed-out features that could benefit a larger congregation, or a religious institution receiving or giving grand donations.
A mosque, synagogue or cathedral might consider using a general accounting tool if they’ve scaled out of a small-business tool. This can also be a good idea for congregations with multiple locations. The reporting features can be more robust and the tool in general may prove more customizable.
An accounting service, or an accounting firm, is ideal for an administration that doesn’t have the experience or skills to adequately perform financial duties. If a leadership team fears any error in financial logging or reporting, an accounting service is a great way to pass the responsibility over to the professionals. Firms can help ensure compliance and handle the dreaded tax season so religious institutions can put the focus back on their community.
To explore any of the aforementioned solutions, visit G2 Crowd to read verified user reviews.