Financial management can be daunting, but good accounting practices help to set your church up for financial stability. With an organized budget in place, your church is able to devote more focus and time to ministry.
A budget provides a way to track income and expenses, giving you the information necessary to make strategic financial decisions. The best way to create a budget is to start at zero, then evaluate each expense based on your church’s needs and vision.
There are many different expenses that go into maintaining a church, from staff compensation to utilities to computer equipment. A budget helps you to keep track of all these different costs and make sure the necessary funds are available.
A budget also allows you to keep track of how much money is coming into the church, whether from tithes and offerings or rental of your facilities. It can be difficult to predict how much revenue the church will receive, so be sure to look at past monthly giving trends for guidance. Erring on the conservative side when predicting monthly revenue helps you to avoid cash shortfalls.
As you plan your budget, keep in mind any new programs, hirings, salary increases, and major fundraising efforts. If possible, try to account for any anticipated monthly increase in expenses, such as insurance premiums.
The importance of a budget cannot be overstated: it enables your church to build a foundation for financial stability and sustainability. Crafting and maintaining a budget allows your church to do what it does best: ministry.
For more information on recommended budget percentages and to download a free budget template, click here to check out our Church Finance Guide.