The tip to avoid this church bookkeeping error is to thoroughly look at each individual you are paying for a service they do for the church and using the IRS guidelines (link in the Misclassification article) to determine if they should be classified as an employee with all proper payroll tax withholding and matching or could be classified as an independent contractor.
We can arrange regular meetings so that you can discuss the reports you need. Also, you can access the bookkeeping online to pull reports and look over the books at any time.
Engaging a specialist to assist your church's bookkeeping is likely to be a significant investment, even if your member is a non-profit accountant or bookkeeper. This investment should be a priority. This investment can be a benefit to your church in three ways.
A bookkeeper might also be required to wear the shoes and treasurer of an accountant or treasurer in the case of a church. They are responsible for all aspects of financial affairs of the church. They are responsible for the following:
FT Walton Church Bookkeeping LLC makes it super simple to get up and running. Our general ledger is perfectly structured and you don't need an accounting to degree to understand.
Problem is, either the pastor or the volunteer may not be familiar with how to set-up and maintain an effective accounting system. So you end up with a poor church bookkeeping system.
So why consider outsourcing? For some smaller to medium-sized churches, having an outsourced bookkeeper can increase expertise & accuracy, lower bookkeeping costs, and provide a missing link in internal controls. Let’s take a look at these one-by-one:
In a non-profit organization, such as a church, the board is the bearer of this fiduciary responsibility and therefore should properly oversee all operations, including finances, to protect the members of the church.
seven years
Financial Records are traditionally kept for seven years. This relates to the laws of tax audits and the number of years back the IRS is allowed to look when determining an organization's tax liability.
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.)