The IRS can impose severe penalties on churches for failing to classify and pay a worker with a 1099...which the IRS considers an employee.
The problem is that neither the Pastor nor the good hearted volunteer may know how to set up and maintain a proper accounting system, so you end up with an ineffective church bookkeeping system...and may not even realize it...until you have bills not being paid, or doubled paid...or financial records that nobody can make sense of...or make proper financial decisions with.
It is important to remember that costs increase as your church expands. There are additional costs for many features, including accounting and church management. Atlanta Church Bookkeeping LLC offers growth opportunities for those who want to grow.
The most vulnerable area for churches is their internal controls. The safeguarding of your resources is increased by having someone outside the financial system reconcile your bank account, track your deposits, verify them, and verify your checks.
Your church has a mission and bookkeeping should not get in the way. The right church accounting software will help you do your bookkeeping quickly and accurately so that you and your staff can focus on the important things in your ministry.
When reconciling your bank statements and your credit card statements, you'll find errors such duplicates and missing transactions, bank errors in rare instances, and amount discrepancies.
However, every church needs to manage finances. Weekly tithes, offerings and taxes are due. There are bills to pay and needs to meet. And, of course, salaries to be paid. It's hard to keep track. Even if your Excel skills are not great and you don't understand how to tell a debit from credit, church accounting software can help you navigate the terrain.
Churches call the traditional balance sheet a statement of financial position. It uses the accounting equation “Assets = Liabilities + Equity” to show a snapshot of your organization's financial health. It also shows the current balance of each of your funds if you've been implementing fund accounting for your church.
Churches And Transparency
The standards of the Evangelical Council on Financial Accountability require that member organizations provide audited financial statements on request.
Churches and religious nonprofits must maintain highly accurate accounting and bookkeeping records in order to maintain their nonprofit status, budget accurately, and provide reporting to government entities and their parishoners or members.