Recently, Chaney & Associates’ founder, Steve Chaney, was a guest on The Church Answers Podcast. The podcast is hosted by Thom Rainer, and the two Christian leaders dove into all things church accounting.

The popular podcast focuses on one key question in each 10-minute installment. Steven and Thom tackled three of these segments, all of which are worth listening to in full. For those looking for the biggest takeaways, here is a quick summary of the best insight from each portion of the three-part conversation.

Episode #178: The Dangers of Your Church Doing Your Bookkeeping and Accounting Internally

In the first episode, Steve and Thom consider the dangers of doing your accounting internally. While it’s convenient to keep things in-house, it isn’t always efficient, effective, or safe. 

That last one comes up early in the conversation when Steve explains one of the critical dangers of entrusting too much to an internal bookkeeper. “Sometimes,” he explains, “when you’re just doing deposits, a person who does the depositing also does the bank reconciliation, also does the check signing, and then they clear all the checks when they come back in. That is ripe for fraud.”

Putting too much in the hands of one individual (especially without proper and consistent oversight) opens up the doors not just for mistakes but for unsavory accounting activity. It happens more often than you might think, and the consequences can be far-reaching.

Steve explains the root of the issue: “You just didn’t have the segregation of duties in place, meaning you didn’t have a second set of eyes looking at certain things.” He also discusses that you don’t need to replace your internal system completely. Instead, you need a qualified, faith-based accounting partner who is legally accountable to come alongside and support you. This helps segregate duties and ensure that everything stays above board.

The conversation continues to include other red flags associated with internal bookkeeping. From confusing QuickBooks categorizations to failing to understand fund accounting, it’s well worth a listen!

Episode #179: Not All Accountants Know Church and Ministry Accounting

In the second episode, Steve and Thom switched perspectives to discuss the outsourced accountant side of things. The key question: How do you know a third-party accountant is qualified to handle your church’s finances?

In the pursuit and exploration of an answer, Steve reveals how difficult it can be for certified, trained, and experienced accountants to translate their knowledge to a church setting. At one point, he uses the dual tax status of pastors as an example. 

“A manager will say, I’ve never paid taxes,” he observes, “Well, that’s a red flag. Cause if they don’t know that a self-employment tax, they’re at least going to pay the 15.3 % on self-employment.” Steve elaborates that payroll concerns like this are reason enough for churches to seek out Chaney & Associates’ faith-focused accounting solutions—but it can get even worse than payroll. Property taxes, income taxes, insurance, the list goes on. Steve summarizes: “There’s just different nuances…And so we find a lot of issues. And then a lot of times you get yourself in trouble.”

Church accounting goes in a category all its own, and Steve and Thom make that clear as they discuss everything from FICA taxes to church size considerations to efficiency-focused church accounting software solutions.

If you’re a church leader hesitating to pull the trigger on an outsourced church accountant, this episode is for you.

Episode #180: Dealing with a Well-Meaning But Not-So-Competent Financial Secretary in Your Church

In the third and final episode, Steve and Thom evaluate the common struggle of managing a well-meaning, over-confident, and too-often ill-equipped individual in charge of church finances. Steve brings up the misconception that financial experience, especially in banking, is often touted as a reason someone can handle a ministry’s bookkeeping.

“A lot of churches say, ‘But this person was a banker. She worked at a bank, and she knows how to do accounting,’” Steve says. “Well, did you know a bank does accounting exactly the opposite of how a business does? Because what you call a deposit, which is a debit, is actually a liability for them. It’s credit.” He finishes by drawing a clear distinction: “She was a good banker or accountant, but she was not a good church accountant.”

The pair go on to discuss how important it is to have a competent and informed church accounting solution. This doesn’t just help with clean, efficient money management. It can also become a protection for a ministry and its leaders’ credibility and integrity.

Good church accounting solutions—both in the form of church accounting software and properly trained CPAs to back those tools up—are key elements in advocating for and protecting pastors from mismanaged finances. The episode sheds much-needed light on the repercussions of approaching church finances with a false sense of experience and security. It is a must-listen for anyone involved in ministry finances.

Hearing from Steve Chaney

Steve is always busy helping churches forge better financial systems and solutions. Getting to hear him discuss core concerns with someone like Thom Rainer is a unique treat, and the result is as enlightening as it is entertaining.

It proves, yet again, why Chaney & Associates is proud to be the accounting firm for the church. We only work with faith-based ministries so that we can provide exceptional accounting and bookkeeping services, focusing on your ministry so you can focus on the finances.

If your church needs bookkeeping support, contact us. We can help you identify areas of concern with your current system and explore the best solution for your needs.