Standard Operating Procedure for Small Church. Help!

[ChristGuard]

Hey Guy's,
I am a pastor of a small church (60 people including kids). I planted this church with my wife and are still in the kind of "We do everything" phase. Meaning I am in charge of accounting and book keeping for now, until we can find a treasurer to train up. Anywho, we were using a web service called Aplos to help us with our accounting, we would do contributions through PowerChurch and accounting and budgeting through Aplos. This year we decided to go just with PowerChurch as it has more features and makes more sense for the long run. What we want to do with powerchurch in 2017: Contributions (we have this part down), Accounting and Budgeting, and Payroll. I am not an accountant but I am happy to learn! What we really need help with is week to week Operating Procedure. Here is how we did it before:

Sunday: Take up offerings
Monday: Day off/Sabboth
Tuesday: Count and Enter Contributions, including PayPal, into PowerChurch. Make deopsite (all money going into main church checking account.
Wednesday: Transfer money to appropriate accounts. We have four, a main checking account (where all tithes and non missions offering giving goes, a Missions checking account for offerings designated for missions, an account for a Para-Church Ministry that we controll, and an external tithe account where we put 10 of the tithes and offerings to give to other ministries around the world.) After Transfering the money I post the contributions (I keep a paper copy as well at this point for record keeping.) Then I would go on Aplos and do fund accounting. I would enter all the transfers from the deposit, then I would enter any purchases from that week and make sure the aplos total equaled the bank accounts total(I think this is called reconciling for the week) then I would designate funds from the main bank account into proper funds in aplos according to the budget (Office Supply Fund, Children's Ministry Fund, Building Fund, Rent and Bills Fund, Salary Fund etc.). We would then check Aplos to see how much money we have to spend in each area by fund. So if we needed a new printer we would see if there was enough in the office supply fund.
Thursday-Saturday No accounting work.

I would love to know if I am doing this right and how to do it in PowerChurch. Can I reconcile weeks? When I turn on power church I have it set to show me accounting info, and I would love to see an up-to-date total of what is in our account and what is in each fund, is this even a correct way of operating?

[NeilZ]

See below:

Hey Guy's,
I am a pastor of a small church (60 people including kids). I planted this church with my wife and are still in the kind of "We do everything" phase. Meaning I am in charge of accounting and book keeping for now, until we can find a treasurer to train up. Anywho, we were using a web service called Aplos to help us with our accounting, we would do contributions through PowerChurch and accounting and budgeting through Aplos. This year we decided to go just with PowerChurch as it has more features and makes more sense for the long run. What we want to do with powerchurch in 2017: Contributions (we have this part down), Accounting and Budgeting, and Payroll. I am not an accountant but I am happy to learn! What we really need help with is week to week Operating Procedure. Here is how we did it before:

Sunday: Take up offerings

Right away I would get others involved with this, and have a group of counters to enter donations directly into Powerchurch, then have them deposit it in your bank's night drop. This does two things. Protects you as the pastor and spouse from any suspicion of wrong doing, and gets any cash out of the church/office/whatever so that there's no bait for any low life to try to break-in.

I have a real-life situation that occurred and I'll talk about that after all this.

Monday: Day off/Sabboth
Tuesday: Count and Enter Contributions, including PayPal, into PowerChurch. Make deopsite (all money going into main church checking account.
Wednesday: Transfer money to appropriate accounts. We have four, a main checking account (where all tithes and non missions offering giving goes, a Missions checking account for offerings designated for missions, an account for a Para-Church Ministry that we controll, and an external tithe account where we put 10 of the tithes and offerings to give to other ministries around the world.)

I realize that this was probably done previously as whatever system you were using could not keep everything separate, but in Powerchurch you can use just ONE checking account to handle all this and you would be able to keep the money separate. Powerchurch can do this, and makes your whole life easier.

After Transfering the money I post the contributions (I keep a paper copy as well at this point for record keeping.) Then I would go on Aplos and do fund accounting. I would enter all the transfers from the deposit, then I would enter any purchases from that week and make sure the aplos total equaled the bank accounts total(I think this is called reconciling for the week) then I would designate funds from the main bank account into proper funds in aplos according to the budget (Office Supply Fund, Children's Ministry Fund, Building Fund, Rent and Bills Fund, Salary Fund etc.). We would then check Aplos to see how much money we have to spend in each area by fund. So if we needed a new printer we would see if there was enough in the office supply fund.

Again, if you have Powerchurch maintaining all your funds, and use just one checking account, you can have your Contributions setup to automatically send the donations to the correct fund, do the 10% tithing automatically, etc.

However, you keep referring to 'office supply fund', 'Children's Ministry fund', and so on. In most churches these are normal day-to-day budgetary expenses, and each year you would create a budget to handle all these church expenses. Everything comes out of the one Operating Fund, and you would check each month's Income and Expense statement to see how well you're holding to that budget.

As far as 'reconciling' the only reconciling you would need to do is when you receive your monthly checking account statement from the bank, either through paper or download. You would check your cash flow using the Cash Management Report.

Thursday-Saturday No accounting work.

I would love to know if I am doing this right and how to do it in PowerChurch. Can I reconcile weeks? When I turn on power church I have it set to show me accounting info, and I would love to see an up-to-date total of what is in our account and what is in each fund, is this even a correct way of operating?

FWIW ... the workflow puts a LOT of work on you, and would frankly put-off anyone who would volunteer for the Treasurer's position.

About that real-life situation. I work part-time at another church as bookkeeper/admin. One evening we had someone sneak in during a community event and hide themselves in another part of the building. After everyone had left, this person broke into the office, pried open cabinets and desks, looking for cash. At one time, before I started working there, they kept their Sunday receipts in a small safe which could really be picked up and walked out with. They would have lost over $1500.00 if that was still the process. However, now they enter Contributions on Sunday, and do the night drop.

The low-life got away with a frozen pork butt from our food pantry, and that was about it.

[ChristGuard]

We have been robbed before, we know have a safe bolted to the floor and the donations leave with us on Sunday. You are right though, we NEED to get a counting team and get it deposited right away, even if it is just to avoid the appearance of evil.

The reason we have separate accounts is to make sure missions money and external-tithe does not accidentally get spent. We don't always have a lot of money in our operating fund, but have more than 10k in missions, as we are a missions oriented church and saving for long term international missions. The last thing I want to do is accidentally spend that money. What would your advice be? Have strong self control? Honest question, really not used to this!

[ChristGuard]

Also: THANK YOU SO MUCH! You are always so helpful! So let me just clarify:

We have four accounts:
Main Operating Checking Account (Stays under $1k, often drained down to almost nothing)
External Tithe Savings Account (Gets up to $1-2k then we donate it to another ministry)
Missions Account (10-20k, used once or twice a year for missions trips)
Para-Church-Ministry Checking Account ($30k and growing, used entirely by Para Church ministry, not touched by church except to recieve contributions and send out tax letters at end of the year)


Your suggestion is to do all of this in one account, and let power-church separate it out? If that is the case (which would save us a lot of work) how would we know how much money is available in the main operating fund for things like bills, salary, supplies, and benevolence? When giving is low we have to cut things out, but if we are only reconciling once a month then how do I know if we have money for the new Bible study the woman's group wants, or if we have money to buy the homeless guys lunch? I am so sorry for all the questions! We are growing and I want us to be doing things the right way, not the way that makes sense to me! Thanks again!

[NeilZ]

Also: THANK YOU SO MUCH! You are always so helpful! So let me just clarify:

We have four accounts:
Main Operating Checking Account (Stays under $1k, often drained down to almost nothing)
External Tithe Savings Account (Gets up to $1-2k then we donate it to another ministry)
Missions Account (10-20k, used once or twice a year for missions trips)
Para-Church-Ministry Checking Account ($30k and growing, used entirely by Para Church ministry, not touched by church except to recieve contributions and send out tax letters at end of the year)


Your suggestion is to do all of this in one account, and let power-church separate it out? If that is the case (which would save us a lot of work) how would we know how much money is available in the main operating fund for things like bills, salary, supplies, and benevolence? When giving is low we have to cut things out, but if we are only reconciling once a month then how do I know if we have money for the new Bible study the woman's group wants, or if we have money to buy the homeless guys lunch? I am so sorry for all the questions! We are growing and I want us to be doing things the right way, not the way that makes sense to me! Thanks again!

You'd know because your monthly income & expense reports for your operating fund would show you where you are spending, how much you're taking in, and what's left over (bottom line of the report) if any.

Apparently you have been 'winging it' and spending as it comes in. Great for a teen working at a part-time job, bad for a church (or any other business) and make no mistake, running a church IS A BUSINESS. Any church needs a board of members who's job it is is to oversee the spiritual, and the physical well-being of the church. Part of this is to properly fund such items as the women's bible study, but also to properly BUDGET for such items so the church is not hemorrhaging money.

My advice, get this book: http://store.churchlawtodaystore.com/churchfinance.html

Best money you will spend as it will give you the basis proper church finance setup.

[ChristGuard]

We have totally been winging it. We do have a board of elders, of course, and we answer to overseers for overall finances, but we are still totally winging it as far as day to day goes. That is what we are trying to fix for 2017 Thank you for the book link! I will pick that up and dig in, I also talked to my bank about night drops and am going to start doing that Sunday afternoons. Thank you so much for all your help, I am sure I will have many more questions soon! Praise God for you Neil!