Churches are under most of the same labor and employment laws that "for-profit" organizations are under. This includes the guidelines for classifying your workers as employees or independent contractors.
There is another reason to keep track . It helps you make better financial decisions. You should be able to look at a report and see how you spend more on expenses than you did in prior years.
Hiring a "experienced" bookkeeper is not very high on their list of necessities. So the Pastor either does the bookkeeping themselves or corrals a member with some "financial" or "organizational" skills and turns it over to them.
Listening is the foundation for a client relationship that is built on trust. Our mission is for you to receive financial leadership, guidance, and advice that can be used to grow your religious organization.
To avoid making a mistake in church bookkeeping, you should carefully examine each person who is being paid for a service. The IRS guidelines (link to the Misclassification article), will help you determine whether they should be classified either as an employee with proper payroll tax withholding and matching, or as an independent contractor.
Religious and faith-based organizations need the expertise and guidance of an experienced Certified Public Accountant more than ever.
Your church has an important mission, and doing your bookkeeping shouldn’t get in the way. Using the right church accounting software helps you get your church bookkeeping done quickly and accurately, so you and your administrative staff can get back to the things that matter most to your ministry.
Working in church accounting, you share the same responsibilities as an accountant in any other organization. You record expenses, track contributions made by the congregation, and monitor spending on various programs. Your duties center around bookkeeping, documenting and controlling finances for a church.
81% of church revenue came from individual donations. 34% of congregations have endowments, which constituted on average 4% of their revenue. Only 2% of churches received revenue from government grants; 12% received finance from non-government grants.
Common Church Budget Categories
Personnel (salaries, benefits, etc.)
Administration (operating expenses)
Facilities and Equipment (utilities, insurance on property, maintenance)
Outreach (missions, evangelism, social events, etc.)