CPA For Churches: 4 Questions to Ask When Hiring a Christian CPA

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Questions to Ask When Hiring a CPA for Churches

Working with a Christian CPA comes with many benefits. They are trained to handle complex financial situations as well as speak the language of the church. They understand things like stewardship mentality and Kingdom-minded goals.

At least, a good CPA for churches has all of those benefits. How do you know you’re working with the right candidate, though?

If you’re trying to hire someone or outsource your church accounting to the right firm, here are a few questions you should ask to gauge if they’re the right fit.

1. How is accounting different for a church from a normal business?

Don’t be afraid to go deep with your questions. You may be hiring an accountant, but it takes more than basic accounting skills to manage a faith-based nonprofit 

Ask for a Christian CPA to highlight a few areas where accounting differs in a church setting. Do they understand what a Form 990 is? How do benefits packages work with church staff? You don’t need comprehensive responses.

The purpose here is to gauge how much an accountant understands the nuances of faith-based financing. The rest of the questions get more specific, such as addressing different accounting methods or how to categorize employees. Before you ask for details, though, feel out how well your church CPA candidate understands these things without being prompted.

2. Are pastors church employees?

There is a big difference between a CPA who is a Christian and a Christian CPA. The former might be a perfectly pleasant individual with a great accounting track record. However, only the latter will truly understand the nuances that come with shepherding church finances.

By asking if a pastor is an employee of their church, you’re posing a surprisingly complicated question. Pastors have dual tax status, are usually employees, and have complicating factors like their housing allowance.

The point here isn’t to quiz your candidate on the finer things of church finance. That’s their swim lane, after all. Instead, gauge how well they understand the question. If they have a quick, confident answer, that’s a good sign that they have a solid grasp of church-related financial concepts.

3. Do you think our church needs to use fund accounting?

On a more technical level, ask what kind of accounting method the CPA would use for a church. The answer, in the majority of cases, should be fund accounting.

This is an effective way for churches and nonprofit ministries to make better decisions through the clean, simple allocation of their financial resources. Fund accounting clarifies financial planning and provides church leadership with greater control over how to spend and report on its money.

In most cases, a good Christian CPA should steer you toward this form of financial management and organization. If they don’t, make sure they have a crystal clear reason to go with something more complex.

4. How would you handle our church taxes?

Churches are nonprofit organizations. As such, they enjoy a unique tax status—usually, they need to do minimal reporting. But that doesn’t mean you can ignore Uncle Sam. There are significant tax-related factors church accountants must consider, such as differentiating between employees and contractors.

In addition, it’s true that most churches are exempt from filing an annual information return for their taxes. However, there is a potential need for filing if a church meets certain requirements, such as bringing in additional income from a daycare, school, or rental property.

A seasoned Christian CPA should be able to ask the right questions and assess your situation. Then, they should be able to provide a quick answer to tax-related questions, such as whether you need to file Form 990 due to additional income, issue 1099s to contractors, or utilize nonprofit tax deductions you’re missing.

Hiring the Right CPA for Churches

From personal convictions to faith-based professional nuances, there are plenty of differentiating factors that set Christian CPAs apart from their secular counterparts. It doesn’t matter if you’re bringing someone onto your staff or you’re considering outsourcing your church accounting. Make sure to vet a CPA who claims they specialize in working with churches and faith-based organizations.

This is one of the key factors that we emphasize at Chaney & Associates. We have invested in becoming the accounting firm for the church. This necessarily requires a specialization in that area, as well as a commitment to keep God at the center of even the most practical financial activities that we engage in.

If you’re looking for a Christian CPA for your church, use the questions above to help make your decision with confidence knowing you’re building a strong, God-centered team to fulfill your church’s mission on every level—even your finances.

For more information on Church accounting, check out our FREE ebook: Taking Church Accounting Seriously: A Guide to Godly Prioritization of Finances in Church.

If you have any further questions, we’re happy to help answer them. Let’s talk about how to build a healthier financial future for your church!

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