10 Reasons to Outsource Church Bookkeeping
Managing church finances can be a daunting task even under the most favorable circumstances. Factor in complex tax reports, bank reconciliations, and ever-changing IRS and state guidelines, and you can guarantee church staff is overspending valuable time on workarounds for processes that could be intuitively streamlined.
With Clergy Financial Resources, your church can save time and money.
Accounting can often take the back seat in the average church. Most don’t have a paid staff with a trained accountant who can devote their day to bookkeeping. This is unfortunate because the fact is your bookkeeping is one of the most important parts of running a church. However, there is a great outsourcing option available for accuracy and compliance reporting.
What Outsourcing Means For Your Church
Whether that means outsourcing your payroll, bookkeeping, or a combination of services, you can expect to gain the freedom to focus on ministry by entrusting Clergy Financial Resources to manage these tasks.
So, if you’ve ever thought to yourself, “I give up! I just can’t keep up with my accounting!” then it may be a sign that you should outsource your church’s bookkeeping.
The idea of paying for someone to do your books may sound intimidating, but here are ten reasons to consider outsourcing your bookkeeping and investing in your financial health.
1: Outsourcing = more accurate bookkeeping
In the typical small church setting, the person doing the bookkeeping typically doesn’t have a lot of training in accounting. By outsourcing your books, you get a full team of trained people who have experience. This ensures:
- You won’t miss important deadlines
- Mistakes will be far less likely
- Your designated funds are separated correctly in the books
- Your financials are intact, accounted for, balanced, and up to date
- Various other types of income are accounted for correctly
2: Skill and experience
The beauty of hiring a professional to manage your accounting is just that! A professional will actually manage it. Outsourcing your bookkeeping allows you access to a high level of expertise. They can answer complex questions and ensure you’re following best practices.
3: Reduce the risk of fraud
According to a study by the Association of Certified Fraud Examiners (ACFE) published in 2016, over 30% of fraud cases occur in organizations with fewer than 100 employees and, on average, small organizations had 49.2% fewer controls in place to prevent fraud. An outsourced bookkeeper has experience implementing strong internal controls, and because they’re impartial, they can help reduce these risks.
4: Save time
You have a million things you have to do each day to keep your church on running, and your expertise in those areas is a much more efficient use of your time. Having an outsourced bookkeeper can free up this administrative task, so you can spend your energy focusing on achieving your mission and managing the day-to-day operations.
5: More consistency
Most churches have a treasurer or volunteer who helps with the books, but these people tend to come and go. Outsourcing means you won’t worry about scrambling to find help at the last minute. You won’t fall behind while you wait for a new bookkeeper, train incoming volunteers, or fix costly mistakes made by people who are still learning the ropes.
6: Improve internal processes
A hidden benefit of outsourcing is it actually improves your internal process. Outsourced bookkeepers have experience with best practices that improve the efficiency and timeliness of data, so it is a smooth process to make it simpler to import data and close the books.
7: Better insight into your financials
Having a professional manage your account means they’ll have up-to-date records and can provide insight into your financial position. Up-to-date financials let you anticipate cash flow, reduce costs, and better your organization’s financial position.
8: Better insight into giving
Your outsourced bookkeeper can also help monitor giving for your church. Correctly tracking income for each designated purpose lets you generate reports to see giving trends. It also lets you monitor giver retention, create contribution statements, and welcome new givers.
9: You can be a better steward of your resources
Accurate tracking of your funds gives your people assurance that you’re using their contributions well and are serving their designated purpose. With great financial reporting, you can demonstrate how your church is following through on your mission with fiscal responsibility. You can also have the reports you need to meet grant requirements and plan for future endeavors.
If you aren’t confident and just don’t have the time to keep up with the books, outsourcing your bookkeeping is the best option.
10: Affordable and customizable
When hiring a full-time or even part-time employee, there are many expenses to consider. Payroll tax costs can include an employer’s share of FICA, federal and state unemployment taxes, workers’ compensation, health insurance, retirement plans, onboarding costs, training, as well as providing office space and equipment.
When you outsource accounting responsibilities, you only pay for the service you need, when it’s needed. What once might have been a full-time job can often be reduced to a part-time administrative position, cutting 30-40 hours of work per week down to 4-10 hours, depending on the size of your church. We can even provide customizable service options, enabling church leaders to pick and choose which services best fit their ministries.
While the idea of moving the church’s accounting to a third-party provider is favored by many church leaders, remember that outsourcing is all about balance and outcomes. Juggling the spiritual and business sides of ministry is a daily struggle. Outsourced accounting can alleviate an administrative burden, providing confidence and peace of mind that your church’s day-to-day financial activities are being cared for by professionals — allowing you to focus on your ministry — and not crunching numbers.
Still, have questions?
Schedule an appointment with the links below.
Clergy Financial Resources
Tax I Payroll I Bookkeeping I HR
11214 86th Avenue N.
Maple Grove, MN 55369
Tel: (888) 421.0101
Fax: (888) 876.5101
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
For more information or if you need additional assistance, please use the contact information below.
Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369
Tel: (763) 425-8778
Fax: (888) 876-5101