Small Church Stewardship
Church Stewardship. Church accounting is an area that many small churches struggle with. Often the church treasurer has some business accounting experience but may not have any specific training in church accounting.
The membership expects the treasurer or church financial secretary to “handle” the church finances appropriately, even though they may have made minimal provision for educating or training on the issues specific to church accounting.
Church Accounting
The issues related to church accounting can be divided into three objectives:
- Compliance with governmental regulations. The Church’s testimony can be damaged if it does not comply with the law. Churches need to demonstrate good stewardship and set an example for their members by being disciplined enough to inform themselves of the relevant tax laws and comply with them. Many Christians today are in financial bondage, and it is the Church’s responsibility to disciple them in Biblical stewardship. The first thing the Church can do in this effort is to model financial responsibility.|
- Minimize the minister’s tax liability. Minister’s taxes are unique. In some areas, they are less than non-ministers. In other areas, they are more than non-ministers. So, it is significant for the pastor, youth minister, music minister, and everyone else involved in church accounting to understand how to structure the minister’s compensation package to minimize taxes properly. It is not immoral or unethical to fully take advantage of legal methods to reduce taxes. Most ministers are underpaid, so they must pay the least amount of taxes possible to adequately provide for their immediate family and be a blessing to other people.
- Sound financial decisions. The Church frequently makes financial decisions based upon the financial reports presented by the Treasurer. If those reports are not accurate, the Church may unknowingly make unwise decisions based upon inaccurate information. Because churches typically use fund accounting, which can be complicated, the Treasurer or financial secretary needs to understand the underlying concepts of fund accounting and accurate financial statement preparation.
Based upon the Church consulting I have done in my local practice, it appears that most small churches struggle with all three objectives.
One of my goals for the Church Accounting Book is to assist/disciple churches in these areas.