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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.

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Church Management church technology Growing Your Giving Base

Top Reasons to Accept Online Giving

LifeWay research revealed earlier this year that only 14% of U.S. Protestant churches offer online giving. That means that although 78% of churches have a Website, an even higher number–86%–of churches offer no method for online giving. It’s most commonly offered in larger churches, and usually has only been in place for one to two years.

While there are equally valid points on either side of the argument, it’s quickly becoming the norm rather than the exception for churches to offer online donations and electronic forms of payment.

Here are a few reasons to offer online giving in your church.

1. Make Giving Easy –

Let’s face it. Very few people are writing checks anymore. In fact, I’d contend that most people only write checks when paying their tithe at church. We are steadily heading towards a time where people don’t carry cash and using a debit card is just easier.

2. People Spend Money Online, Why not Give Online?

The boom of ecommerce sites in the late 90s wasn’t a fad. In fact, it was a glimpse of what the future had to hold for us. The days of a brick and morter store surviving on their inventory alone are gone. With the rise of online shopping, the consumer is now in charge. We are able to shop an available inventory of potentially thousands of products.

People are already spending money online, and comfortable with it. Make it easy for them to give to your ministry online.

3. Stay ahead of “slump” times of giving –

It’s a given that churches will go through seasons where giving slows down. This generally is around secular holidays and summer. People are on vacation, out of town or just get busy. Also, there are times throughout the year when weather makes it impossible to get to church. Chances are, there are only a few faithful givers that will make up the gifts they missed because they were unable to attend. Offering online giving options makes that simple.

4. It’s Easy to have the giving conversation –

We all know that money sermons are often ones that make us uncomfortable. Most pastors will avoid them, and even when they do approach the topic, they tread lightly. Online giving options make those talks non-confrontational. Write an article about the reasons to give, engage people online, send an email reminder or newsletter. Oh by the way, remember to include the link to your online giving link in that conversation. It’ll be a good ice-breaker.

5. Stamps are expensive –

Who knows how long the USPS will stay in business. With the cost of stamps going up, people are looking for alternatives to send documents and such. Can your out of town members, visitors, family members easily give to your ministry? Don’t you think they’d rather hop online and make an electronic gift instead of using a stamp?

6. It’s easier on your financial team –

Volunteers are great. Having a team available to count donations from your service is great. However, anytime people are involved, mistakes can be made. Counting cash, recording checks, counting envelopes, there are any number of ways that someone could make an error. Not to mention the threat of stealing.

7. It’s a hedge against embezzlement –

I know, I know, your church is immune. No one would steal from you, you have complete trust in your team. That’s the same thing most people said before they were the next victim in a long list. A transaction directly from the givers account into the churches account is the safest transaction that can happen to receive money. Now, use a good system to manage that money to keep it safe under your control.

8. You’re limiting the amount people will give –

This one is a small stretch, but studies have found that people will tend to give more when doing so electronically. Offering the ability to give online adds another option for giving and may increase the amount you will receive.

If you’d like to know more about how your church can get started offering online giving, we have tools to get you setup. It’s really simple and easy. Contact Us Here to find out more.

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blog Church Management Time Management

Tomorrow is Today

I have to make a confession, I am a Lazy, Procrastinator.  You need only look at the timing and consistency of this blog to see proof.  Like many people, I’ve learned that there are never enough hours in a day and there is a consistent struggle between work, home, family, etc.

One thing I realized recently was the fact that Tomorrow becomes Today real quick.  Looking back a consistent message to myself was “I’ll do that tomorrow.”  What took me this long to see was that tomorrow was here before I knew it, and tomorrow has tasks of its own.

So what now?

I have now set a rule for myself to filter the statement “I’ll do that tomorrow.”  If I say that, I have to schedule it right then for a time the next day.  What I found by scheduling the tasks was a reality of what it would actually take to complete.  Often, by planning it on paper (typed into my calendar) I was able to get an objective look at the task and realize that it wasn’t as big as I thought and getting it done now would not take that long.  It was amazing what I was able to get done once I used my calendar as a filter to objectively plan out the task to complete.

What steps, processes or thoughts to you use to manage your time?

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Career Opportunities Church Finance Church Management Church Thoughts Leadership

Budget for Contingencies

After working with several churches recently I found an interesting trend that I wanted to share.  As we were preparing budgets for the upcoming year, we found that most of the churches initial draft contained most of the line items from the previous year with an adjustment for the upcoming year.

While this is exactly correct, we found an area that many churches were leaving out and not considering.

A friend of mine has added a line item to his budget each year which he uses as contingency.  He purposefully budgets for opportunities that may arise throughout the year.  By adding this money into the budget, he is better able to make decisions as ministry opportunities arise.  He is also able to side-step potential landmines if unexpected bills should appear.

For most committee driven churches, the very idea of a contingency budget line will send most finance committee chairs into a frenzy.  However, I’d contend that the lack of this line could be more detrimental to your flexibility for ministry.

Take a minute and review your budget this upcoming year.  Have you budgeted to allow God to move and bring opportunities your way?

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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.

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blog Church Management

There’s Freedom in Trust

I recently had a conversation with my business partner.  We were discussing the business and what the next steps might be for us as things progress.

In the discussion, he mentioned to me that I needed to be careful that I guard myself so that when I attend my church, I am a worshiper and not an advisor/consultant/etc.  It is so easy when we work to help churches for a living, that we can become unable to divorce business from worship.

That caution led me to an interesting observation.

He is the Executive Pastor at the church I attend.  I was confidently able to tell him that I am able to separate when I attend church because I trust him.  I can attend church and worship freely because I trust that the “business” of the church is being handled.  It’s amazing that:

“There is Freedom in Trust”

We’ll hash that idea out over the next few months but it does lead to the question:

Do the people that attend your church trust that everything is being taken care of on the back end so they can focus on worship?

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Church Management Church Thoughts

Are you Making a Good First Impression?

I started my career post college as a golf pro. I was the one standing behind the counter at the course taking money, scheduling tee times, etc., etc. Some guys would think that is a great job… I’d beg to differ, but that’s another story.

There were quite a few things, however, that I picked up working at various golf courses that have had a transcendent impact into how I view ministry and ministry operations.

I remember vividly working at a golf course for a pro who evidently showed how stressed he was on a daily basis. While he was far from the best boss I’ve ever had, he did share with me something that has stuck with me. A small statement that I have remembered and used to this day.

“Josh, there are hundreds of golf courses that guys can choose to play. There are many within 40 miles that are very similar to ours, they are well maintained, provide challenge, and are in the same price point.

What is it that brings people to our course and keeps them coming back with all the alternatives? The SERVICE they receive when they walk in the door.

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Church Management Leadership

Who Runs Your Church?

Pastor, Who runs your church?

Now I know the ‘churchy’ answer is God, and ultimately that is entirely correct. Without God at the head of our churches we are nothing more than a social club.

What I am asking here is who controls your church church.

I’ve met with far too many pastors who, while they may not admit it, are victims of a over-controlling secretary. Its not intentional, they just have personalities involved that dominate. They are the ones that tend to make the biggest contributions to the church. In many cases, rightfully so, they are putting in the leg work. However, how many times does their opinion, tastes or likes become the predominant culture of your church?

Instead of beating around the bush I’ll just come out and say it. How many times does your secretary plan an event, cater that event to what she wants, invite the input of circle of friends, and then everyone expects that event to be received from the overwhelming majority of the church…

** Disclaimer: I have met many God-fearing, loving secretaries that are humble servants to the church. I have, however, been around at least as many that are acting detrimental to their church. **

Pastor, here are some things to consider:

1. You are the pastor. You are the one called to lead the people of your church and grow. You are the spiritual guide of the church. Take Charge and Lead!

2. When secretaries become controlling it is often not their fault. Just like in a marriage relationship, when the woman doesn’t feel like her husband is a leader and protector, her natural instinct is to attempt to compensate. Take Charge and Lead!

3. The secretary is often over-looked as an ambassador for your church. The attitude and personality she (or he) presents is often the impression that people will get of your church. Take Charge and Lead!

4. Your staff is your team. Your staff is there to help you minister to the congregation. Share with them in victories and defeats. While you are their boss, you are also their pastor. Take Charge and Lead!

This could produce some heated discussions but I am interested to hear what others have to say on this topic.

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Church Management Leadership

In Tune With the Vision

I recently met with a pastor who was describing their church. I immediately drew an image in my mind that illustrated their operation. I couldn’t wait to get back to the office and describe. See Below:

The Senior Pastor, had a vision, told people about it, but really was doing nothing to articulate how to move towards the vision nor providing the leadership to move towards that vision. As a result, he had ministry leaders that were all well intentioned, but were in actuality working in vain because each was doing their own thing.

 

A better example would be this:

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Church Management Daily Thought Leadership Outreach

Prefers Traditional Music…

I was perusing through a list of churches seeking pastors and saw a job description with those three words, “Prefers Traditional Music”.

I know the debate over traditional vs. contemporary worship will continue to divide this side of heaven. However, what does it say about the openness of your church by making that statement?