Accounting Church Finance Church Management

Tips to start your next year budget planning

Well it’s June.

Summer schedules are getting into full swing, a time for vacations, barbecues and VBS.

As we mentioned last week in the article Preparing for the summer cash flow lull, now is the time to plan and budget for what often are lower income months for churches.

This is also the perfect time to begin your budget process for the upcoming year.

“WHAT, You say!?!? We’re only 6 months into the year. We have plenty of time to get that done.

While that is true, what appears to be plenty of time now will very quickly become crunch time. Fall will be here before you know it.

Here are 3 tips to start the budgeting process for next year.

(Of course, here I am assuming a calendar year Fiscal Year)

Review your current year budget against YTD spending and expenses

Where are you at currently in year to date spending? Obviously, for many items that spread out over the year, you should be close to 50% of planned spending. There are items that only occur at certain times of the year so that is not going to apply to all expense lines, but will be a good start.
– If you are over or short on some lines that are consistent expenses throughout the year, consider an adjustment.

Take time to review your “Growth Engines”

What are those things in your ministry that are producing “growth.” I chose italics because we don’t want to be too narrow focused that growth is quantifiable numerically. In many cases it will be numbers so what are those things that you are doing that reach people. What is bringing people to the church? What is helping people grow spiritually?

We’d challenge you to consider investing in areas that produce growth and strongly review and consider those items you are spending money on that may not be producing “growth.”

Consider your “Growth Engines” to date and plan a budget increase accordingly

What has happened so far this year in the growth of your ministry? Are you seeing an increase? Has giving increased? If not, you should consider some options we laid out in this post

Now is the time to start praying and seeking the Lord’s guidance for the finances of your ministry. Ask for a big picture approach to the budget. Here are some questions to consider:

What ministry areas do we want to focus on for the upcoming year?

Are new ministry opportunities opening to us?

What’s changing in our community that we need to be aware of and prepare for?

Look to simplify your budget

As your ministry develops and grows, the quantity of expense categories will also grow. Over time, this can get out of hand and lead down a road where future year’s budgets and reports can get confusing and difficult to analyze.

Consider this time to simplify.

We’re not necessarily saying to remove lines, but let’s think about things in terms of bigger buckets. What is your mission of the church? Let’s break up the mission and create those areas as “Expense Buckets”

For instance, let’s consider the following.

Give, Grow, Go, Guide

Using these items we’ll setup the following:

Give – outreach expenses for local ministries, things you’re doing to give back to the community, etc.

Grow – expenses for ministries within the church

Go – expenses for missions

Guide – for lack of a better word and it started with “G”, but this is where I’d put all operational expenses. Utilities, Rent/mortgage, Insurance, Payroll, etc.

Start Today!

Overall, because summer gives most of us a time to slow down, it’s also a great time to review and plan for the upcoming year.

Here is a good rule of thumb for scheduling your budget review. (once again, assuming calendar year fiscal year)

June – begin review of current and big picture plan for next year
August – Begin to formulate upcoming year expense plan
September – Have new year budget prepared for leadership review
October – Have budget prepared for congregational review and vote (if necessary)
November – Finalize budget based on leaders and church response
December – Implement budget adjustments for the next year to hit the ground running Jan 1.

We’ll post next month some info on tips to get more specific with budget planning.

Accounting Church Finance Church Management

IRS Announces New Mileage Reimbursement Rates

Since most people aren’t anxiously waiting news and updates from the IRS, you like many others may have missed the changes the IRS made to the mileage reimbursement rates for 2013.

Starting January 1, the IRS has increased the rate of reimbursement by $0.01 for mileage driven for church-related business purposes.  Being aware of this change will help you to budget correctly should this be an area of spending for your church.

As always, if you’d like more information on making the bookkeeping process for your church more simple, Contact Us and we’ll show you our tool for simplifying church accounting.

Accounting Church Money Saving Ideas Growing Your Giving Base

Only 6 Sundays Left…

Only 6 Sundays Left…

Before the end of 2011. Pastor, now is the time to begin to remind member’s that their donations must be received by December 31st to be counted in this giving year. December 31st this year is a Saturday.

What are you doing to encourage year end giving?

Let me suggest five ideas:

Accounting Church Management Leadership

Church Accounting Internal Controls

I just received a link to a news article in the Gaston Gazette from a friend about a couple that embezzled $200,000 from their church.

[quote] Oh, that won’t happen to us, Mrs. Smith has been keeping our books for years and she is such a nice lady.[/quote]

Unfortunately, that’s what this church thought as well.  This nice, unassuming couple met at the church, were married at the church and had been keeping the books for year.  Everyone thought it was fine until they had a large bill to be paid and couldn’t.

[quote]But we have checks and balances to keep that from happening.[/quote]

Accounting Church Management church technology

Church Financial Backup & Recovery Plan

Have you given thought to what would happen if your bookkeeper got sick or had to be away for an extended period of time?


What if heaven forbid something devastating happened to your facility?


Do you have sufficient backup & recovery plans in place for your church?



[quote]We have a seamless solution that will insure your church’s financial operation are always operational.[/quote]

Accounting Church Management Growing Your Giving Base

Budget on Faith, Spend on Reason

For many churches, we are coming into the season when it is time to start planning for the upcoming year. That planning includes setting a budget on how to allocate the resources God has provided the church.

There are no churches that should be operating without a budget. Even churches that think they are too small or don’t have enough income should still have a budget. Actually, some of the smallest churches should budget more as money is scarce, and it’ll provide key analysis for requesting assistance should that be necessary.

Accounting Church Management church technology Time Management

A Remedy for Overworked Pastors

I read Thom Rainer’s blog this morning and he has a great post about depressed pastors. In the post, he mentions several potential reasons why the pastor may be depressed, or burned out. Each of his points are very valid, although I would add one additional point.

Many times, the pastor is the only employee of the church, and if not kept in check, he’ll often over-task himself and suffer from being overwhelmed with being responsible for keeping the organization afloat. We all have that tendency to want to do it ourselves and I’ll be the first one to admit my weakness in this area.

Accounting Church Management Payroll

A Tax Credit for Churches?

The health Care Reform law has some provisions for churches to take advantage of a tax credit for health care premiums paid to employees.  There are several contingencies required and it definately benefits smaller organizations but the video is worth watching.

The credit is payable in cash since churches generally do not pay taxes.

Check with your CPA to find out if you qualify.

Your Church Blog: A Tax Credit for Churches?.

Accounting Church Management General

Ministers Housing Allowance Possibly Under Attack

In an article orignally posted on, Stephanie Samuel discusses how a current court case could affect how churches can compensate pastors pre-tax through the use of a housing allowance.  An atheist group is presenting the lawsuit claiming that ministers are unfairly allowed to not pay taxes and the remainder of tax payers are picking up the burden.

The court case should go to trial in the Fall of 2011.  Hopefully, ministers will be able to continue this program that has helped many churches afford to compensate their pastors.

The full text of the article can be found at:

Accounting Church Management

2010 Giving is due by December 31st.


Remind your congregation that all gifts for 2010 must be received by December 31st to be reported on 2010 giving totals.  December 26th is the last Sunday of the year.  Remember to send out reminders to your congregation.