The Golden Rules of Church Finance Management

The news seems to include a fresh financial scandal virtually every single day. The prevalence of corruption in the United States has reached the point that many of its citizens now assume that even the most reputable organizations are tainted by the vice. The church will not perish as a result of this circumstance. The church cannot afford to be reactive in today's culture; rather, it must continue to be proactive in managing its resources in a way that is beyond reproach.

The current climate of suspicion about the administration of church funds can be partially mitigated by adhering to the golden principles of Church Financing that are detailed below.

Spiritual leaders should have the same level of respect as those in charge of finances.

It is common for churches to encourage members of the community who hold influential positions in other spheres, such as business or the community at large, to serve in trusted leadership roles inside the church. However, before requesting someone to assist with the management of the church's money, one needs to take into account the level of spiritual maturity that person possesses.

Inquire about their private spiritual life and the efforts they make to testify. Additionally, in order to fill these significant leadership tasks, a person has to first hear God's call on their life. These individuals are frequently responsible for determining the path that the church will take in the years to come.

Integrity should be maintained to the highest possible level by those in charge of financial management.

There should not be even the slightest indication that the church's funds are being mismanaged in any way. Make it a requirement that any purchase that is above a particular amount of money needs to go through the process of competitive bidding. Do not provide insurance coverage to a certain firm just due to the fact that the agent is a member of that company.

The proprietors of businesses that are members of your church ought to embrace the chance for competitive bidding as a way to give the church the greatest value possible. The "good ol' boy" system has no place in the church of today and should be abandoned. Because there is such a severe lack of honesty in the business world, the church needs to maintain its steadfastness.

Members of the church should get comprehensive financial reports.

Putting together thorough financial reports can be a challenging task. How much information is considered to be excessive? If a member of the congregation has a question about the church's finances, they should be able to obtain answers to their questions, with the exception of the remuneration of the church personnel, which may be required to be kept secret for a variety of reasons. If possible, provide information either on a regular basis or through annual financial assessments.

Maintain a system of checks and balances at each and every level

It is inappropriate for the church treasurer to be present during the process of receiving, counting, or depositing church monies. The traditional responsibilities of the church treasurer include the distribution of monies, the recording of financial transactions, and the provision of reports regarding the church's financial administration. Additionally, the tasks of receiving, tallying, and depositing the church's financial resources have to be carried out by a variety of people. Create a mechanism of Church Financing wherein members who are not linked to one another take turns serving in various positions, if at all possible.

When it comes to concerns about money, the members of the church should have the last word.

Although the day-to-day management of the church's finances may be entrusted to a variety of staff members or committees, these persons are required to continue to be accountable to the larger church body. There should never be a situation in which the church hands over all authority to a select few people. It's been stated that power corrupts at any level, but absolute power corrupts completely. Everyone needs to be accountable when it comes to managing their finances.

Start to Value People

It is crucial for the leadership of churches to respect and value the time of the individuals in their congregations, whether they are paid, employees or unpaid volunteers. This acknowledges, in particular, the significant contribution that volunteers make toward the administrative and financial management responsibilities of churches.

The following are some concrete methods that may be used to assist and promote volunteers

●       Lessen the amount of time that individuals are required to spend performing the tasks:

●       Make effective use of the available systems.

●       Make sure that individuals are receiving sufficient education and assistance.

●       Make sure that the individuals are aware of what is expected of them and document it.

●       Maintain an open mind to new modes of operation, particularly in light of the fact that growing technology may help save time while also providing more accountability and transparency.

●       Plan to examine and improve some procedures and systems each year on a step-by-step basis and make one or two enhancements to the administration of finances each year.

●       Recognize those who are serving the church behind the scenes just as much as you do those who are in plain view.

●       Do not overwork your volunteers.

●       Offer compensated help in order to lighten the strain.

●       Recognize and thank them for their effort in a public setting, such as at an annual dinner.

Follow the law

We've discovered that many churches ignore the need to be up to speed on legal and accounting compliance standards. In this way, they disregard the necessity to follow the law of the nation. Surprisingly, some churches believe they are free from these obligations.

Here are just a few examples of rules and regulations that may apply to your church:

●       ATO payroll regulations such as STP, PAYG, and Non-cash Benefits

●       Regulations for FairWork

●       Religious Practitioners' Tax Obligations Regarding Fringe Benefits

●       Obligations relating to the payment of people's services (assuming there are no taxation liabilities are a significant risk)

●       Obligations under GST

●       Cash Transaction Reporting

●       Other regulations of the municipal, state, and federal governments