I am most fulfilled when I am assisting churches with their bookkeeping and helping them to develop procedures.
Bookkeeping for churches is much like running a business. It requires having a budget and a set of financials to present to the congregation. The budget is based on historical information and/or projections. Income is accounted for based on the type of giving and separated by the individuals that contributed. The individual information is most important for year end reporting to the congregation for their taxes. The expenses are separated into the various ministries and then the operating expenses such as supplies, utilities, etc. Churches have to pay bills just like everyone else.
Therefore, they should have a checking account and reconcile it monthly. The one difference between a church and a business is that they do not have to file a business tax return. Churches have to file payroll taxes for employees and sales tax if they sell products on a regular basis. I believe that some time in the future churches will have to file tax returns similar to non-profit organizations.
What other tips would you share with bookkeeping for churches?