Another important reason to keep records is to make sound financial decisions. A report should be available that shows you how much you spend on expenses compared to previous years.
Set up a church bookkeeping system that not only tracks expenses and income, but also tracks your assets and liabilities.
These responsibilities vary between churches depending on their job description, or the guidelines of their bylaws.
The church bookkeepers are often mistaken with accountants for a long period. They have very different responsibilities. Bookkeepers are responsible for maintaining the financial records of the church. This includes income records and expense records. They are responsible for keeping records of every transaction that the church makes. It is their job to keep track all accounts. They also verify that accounting procedures have been followed correctly. Accounting, on other hand, does all the accounting work and provides auditing and tax planning as well as financial planning, payroll processing and consulting.
The most vulnerable area for churches is their internal controls. The safeguarding of your resources is increased by having someone outside the financial system reconcile your bank account, track your deposits, verify them, and verify your checks.
By reconciling your accounting with your bank and credit card statements, you will find errors such as duplicates, missing transactions, bank errors on rare occasions, and amount discrepancies.
Even if you have a church member who is a certified accountant or bookkeeper, hiring a specialist for your church's bookkeeping needs will likely be a large investment. We recommend that you make this an important priority. Three ways that investing in your church will benefit you are:
Churches call the traditional balance sheet a statement of financial position. It uses the accounting equation “Assets = Liabilities + Equity” to show a snapshot of your organization's financial health. It also shows the current balance of each of your funds if you've been implementing fund accounting for your church.
Churches And Transparency
The standards of the Evangelical Council on Financial Accountability require that member organizations provide audited financial statements on request.
Churches and religious nonprofits must maintain highly accurate accounting and bookkeeping records in order to maintain their nonprofit status, budget accurately, and provide reporting to government entities and their parishoners or members.