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Posted by: Charles P Myrick CPA Posted on: Sep 25 2018 Posted in: church management

Is a Budget the Right Tool For Your Church?

A church needs to be financially healthy to carry out its planned mission. A budget is a necessary tool for achieving the congregation's goals. It can serve as a roadmap for planning and decision-making. Here's why:

 1. A budget gives a realistic picture of the church’s income and expenses.

The church budget allows your leadership team to monitor how the money is allocated and to make decisions about the future. What expenses are necessary? Have you planned for facility maintenance and emergencies? Are you saving enough? Does your spending plan support your church’s goals?

2. A budget can strengthen the congregation.

When members are involved in the budget process – when they see or review the documents - they have a clear picture of how their individual giving impacts the needs of the church to accomplish the mission. A budget should be clear enough that any church member can understand.

3. A budget builds trust.

Unfortunately, churches are not always given the benefit of the doubt when it comes to their stewardship of money. There have been a few ministries that have used questionable fundraising practices. In some instances, the funds were abused. This affects both the congregation and the community at large. Outsiders are skeptical that the church is just after money, and members are concerned about how the church uses its resources.

Having a transparent budget builds trust with insiders and outsiders and neutralizes skeptical arguments about the church and money. We need to realize that the way we present things such as our budget can have a dramatic effect on the way people perceive the mission of the church.

4. A budget guides fiscal management.

A healthy budget helps staff and volunteers review the church’s fiscal management policies and practices. You can identify specific areas that are problematic such as off-budget purchases approved by the board, unrecorded collections, or mismanagement of a petty cash fund. By carefully adhering to the planned budget, everyone is maintaining accountability.

Churches and religious institutions may be Godly sanctuaries, but they are run by very human people who often juggle many roles and responsibilities. When it comes to financial planning, budgeting and dispersing, financially sound churches do it with the guidance of a qualified professional. 

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Charles P. Myrick is a Washington, DC accounting firm offering specialized CFO services to churches and religious institutions. Myrick CPA was voted Best Accounting Firm in DC, 2016 and 2017, Washington City Paper Readers’ Poll. Request a confidential consultation, today.