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Signs That It’s Time to Outsource Your Church Bookkeeping

Church accounting isn’t easy—even for an accountant. Overseeing a faith-based, non-profit organization’s finances requires a unique set of skills. Church bookkeepers must be able to simultaneously manage money while keeping a church’s missional focus in mind.

When a church is smaller, it’s possible to manage this in-house. However, if a ministry grows, its financial complexity does, too. When is the right time to consider passing off the increased responsibility to a third-party accountant? How do you even know if a financial professional can handle church finances?

Here are some of the signs that it’s time to outsource your church bookkeeping—along with some suggestions for what to look for in an outside accounting solution.

Giving Levels Are a Good Indicator

One of the biggest reasons to consider outsourcing your accounting is the size of your church. More people mean more giving, which means more money to manage.

Of course, each church has different giving-to-attendance ratios. That being the case, it’s often smarter to approach the question based on dollar figures rather than the number of attendees at any given Sunday service. 

At Chaney & Associates, we consider a church with $250,000 or less in total tithes and offerings to be a “small church.” In that case, you should be able to use a church-friendly software solution to oversee everything in-house and generate your own financials. Once you cross that quarter of a million dollar mark, it may be wise to get a professional firm involved.

Financial Complexity Is Also Important

How complicated are your church’s finances? Are you paying a mortgage, a single staff member, and some utility bills? In that case, you can try to handle financials with a good software setup and a savvy volunteer.

If you have multiple funds, more than one property (such as a parsonage), or a larger staff, things can get more complicated. And that doesn’t even consider the legal end of things.

Churches may be tax-exempt, but that doesn’t mean they can operate in a bubble. Tax laws, regulations, reporting requirements, compliance concerns, and avoiding related penalties require significant accounting skills. If you feel things are too complex, it may be time to pass things off to a professional.

Assessing In-House Talent Can Influence the Decision

Who do you have on staff to perform in-house bookkeeping activities? If you have a retired accountant volunteering their time, you may be all set. Even someone who is less trained but is comfortable using an intuitive faith-based accounting software program can be enough for a smaller church. 

If your in-house team’s strengths tend to lie outside of the financial arena, that can create issues. Even if a team is capable, if it’s overstretched, that can be a red flag. Remember, even basic church bookkeeping takes time, especially at certain times of the week, month, and year.

If your team lacks the skills or is already stretched too thin, that can be a sign that you should outsource your accounting. For growing churches, this also creates a more sustainable financial structure as you scale.

Cost Considerations Aren’t Always What You Think

Outsourcing accounting doesn’t automatically mean your costs will go up. Make no mistake, outsourcing will cost you something. But often, the alternative is more expensive.

For instance, hiring a full-time accountant can be prohibitively expensive compared to working with an outside firm. The cost of missed tax deductions, compliance fines, and other potential issues also factor into the situation.

Don’t forget the non-tangible cost of in-house accounting, too. When you bear the burden of financial management in church, it comes with added stress. Make sure to count the costs before assuming outsourcing is the more expensive option.

Choosing an Outsourced Accountant for Your Church’s Bookkeeping

When the time comes to outsource your church bookkeeping, the next question is: how? Here are a few things to look for when passing off faith-based finances:

  • Find a Christian CPA: A God-honoring professional accountant will be able to provide Kingdom-minded guidance and oversight for your finances.
  • Consider your budget: What you can afford makes a difference. Consider your church’s budget and look for the best combination of church accounting software and human support for your circumstances.
  • Look past basic financials: Gauge the ability of each CPA you consider to ensure they can go beyond basic accounting services and offer professional, informed consulting and planning advice, too.

You don’t have to have thousands of attendees to get some help with your accounting. Factors like accounting complexity, cash flow, and in-house talent can indicate that it’s time to look outside of the four walls of your church for some money management support. 

If that’s the case for you already, contact Chaney & Associates today. Our team of professional accountants can go over your situation and help you discover the best way to support your bookkeeping needs moving forward.

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