No matter what time in your church’s fiscal year it is, if you’re a pastor, office manager, or treasurer looking for effective church budgeting tips, you’ve come to the right place. We’ll be outlining some church budgeting tips to help you streamline your accounting process, balance your budgets, and manage your accounts! By making a few small changes to how you approach your church budget, you can more effectively steward the gifts that God has graciously entrusted to your church.
Identify Fixed vs. Variable Expenses
Like any organization, churches will have both fixed and variable expenses. Accounting (no pun intended) for both of these will make the budgeting process easier.
Budget for any fixed expenses that might recur monthly or yearly. Within your church accounting software, you should be able to set up recurring transactions at a specific frequency (such as “the first Friday of every month” or “every year on November 30”).
Examples of fixed expenses:
- Mortgage
- Software
- Salaries
You should also estimate variable expenses as best you can, in order to try to maintain an accurate budget.
Examples of variable expenses:
- Hourly labor
- Building maintenance
- Utilities
Of course, you can only estimate your variable expenses, but even having a ballpark idea from previous years can assist in the accuracy of your church budgeting.
Implement Secure Double-Entry Accounting
Double-entry accounting is the standard for any business, and churches are no different. By using a dual-entry system of debits and credits, you can ensure that you have error-proof transactions within your church accounting software. This budgeting tip can help you stay on top of all your accounts and keep accurate financial records!
Additionally, ensure that your church accounting software has a secure audit trail. This feature not only ensures accuracy across your accounts but also allows you to track all activities within the software—so if you ever encounter an issue, you can see which user implemented the change, and when.
Account for Fluctuations in Giving
This may seem obvious, but it’s worth noting: When you budget annually, make sure to take into account seasons where giving may be higher, based on past years’ records.
Do you see a slight bump during Lent and Advent because of your midweek services? Is Christmas your biggest giving day? Maybe you see more offerings given at Easter. Or maybe your church sees a slight increase after Vacation Bible School.
Whatever the trends are in your church, you can account for those in your yearly budget to get a bigger picture of your finances for the year, rather than estimating the same amount for each month.
Utilize Last Year’s Data
Save time in your budgeting process by using last year’s data within your church accounting software to give you a starting point for the next fiscal year’s budget. You can, of course, adjust the amounts to account for inflation and raises in pay. So, while you’ll still have to make changes, you can avoid reinventing the wheel each year!
Start implementing these effective church budgeting tips with your free 37-day trial of Church360° Ledger, the CTS web-based accounting software.
