Donations and contributions form the financial backbone of most churches, and managing these funds with diligence is critical. Churches must establish a systematic approach to record-keeping and acknowledgment to ensure all donations are tracked accurately and receipts are issued in compliance with IRS guidelines. Contributions of $250 or more require written acknowledgment to donors, detailing the amount and any goods or services provided in return. This facilitates tax reporting for donors and reinforces trust and generosity. Effective financial management is essential for churches to fulfill their missions while maintaining transparency and accountability.

Honoring this trust requires transparent church financial reporting practices to ensure money is wisely spent and that spending aligns with community and outreach goals. Real churches have found that taking these implementation steps seriously pays off in the long run. For instance, First Presbyterian took six months to fully transition to their new system, but because they followed a careful implementation plan, they haven’t had a single major financial hiccup in the three years since. Their administrator notes, “The time we spent on proper setup and training has saved us countless hours of troubleshooting and corrections down the road.” Aplos is specifically built to serve the unique financial needs and dynamics of nonprofit groups and faith-based organizations.

• To achieve and maintain tax-exempt status under Internal Revenue Code (IRC) Section 501(c)(3), churches must operate exclusively for religious, educational, or charitable purposes.
• First, it’s worth implementing software tools purpose-built for church financial management.
• FreshBooks’ award-winning customer support means you never struggle to get assistance.
• IconCMO even allows churches to schedule, register, and track attendance for events, such as classes, meetings, and fundraisers.
• Sage Intacct, with its cloud-based architecture, is particularly beneficial for large churches that need centralized financial management across multiple ministries or locations.
• Create custom tags to tie donations to specific funds and programs for better organization and easier reference later on.

Churches wanting to gain an understanding of and engage a large body of parishioners and donors can add a CRM. Finally, churches that sell merchandise, such as books authored by pastors, can add a commerce-ready ERP. For churches that manage projects, such as adding facilities to the church campus or responding to natural disasters, Xero’s Established plan offers unique value. It can track project expenses and perform in-depth financial planning for projects. Features include time tracking and reports, budget building and estimates, customized quotes (so donors know the need), cost linking to jobs and projects, and reports that show how every donor dollar is spent. The best church accounting software offers full accounting functionality at affordable nonprofit prices.

Tag it, track it

So, you can have a close-up of your churches’ finances and make informed data-driven decisions. Reports can be customized with account segments to show only what you need to see. Customize standard accounting reports by selecting all the criteria you want to include in your report, such as specific time periods, funds, core accounts, and departments. While the cloud-based software always has a team at hand that is ready to help, desktop accounting software can become outdated and the support insignificant. When the new features get developed, your cloud-based software gets updated so the church can access new features with no extra work or additional cost. To avoid running out of funds mid-accounting season, Charge Windows equips you with budget creation plans that help you outline the preceding expenses for any scheduled repairs, or something else.

Evaluating Key Features and Functionality

Another benefit is the import rules feature, which lets you set up custom rules to automatically categorize transactions. By assigning default categories and funds, you can ensure consistent and accurate financial records. This automation simplifies your bookkeeping tasks, allowing you to focus more on your ministry activities. Track your expenses, budget, donations, and other transactions with Realm.

Accounting Software Built for Churches

It is also cloud-based, so church staff can access financial information, member directories, or donation records in real-time wherever they are. This may include external audits to ensure its finances are accurate and complete, or the use of financial tools backed by comprehensive support to help give your team financial transparency and improve decision-making. As a result, financial data offers more than a numerical overview of current conditions—it also provides the opportunity to educate congregations on stewardship. With advanced reporting tools your team can access key metrics such as total giving amounts over a set period, the total number of first-time, second-time, lapsed, and recovery givers, and the average giver retention rate.

Reconcile with bank and credit cards.

• Non-clergy staff are subject to standard withholding for federal and state taxes, Social Security, and Medicare.
• Its $7.99-per-month Deluxe plan is a desktop app for Windows and Mac with a mobile companion for iOS or Android devices.
• As you sift through the available accounting software options, it’s essential to evaluate key features and functionalities that align with your nonprofit’s needs.
• These principles guide the preparation of key financial documents, such as the statement of financial position, statement of activities, and statement of cash flows.
• Overall, ACS Technologies is seen as a powerful and flexible church management software that can help churches streamline their financial processes, improve efficiency, and make more informed decisions with real-time financial data.
• QuickBooks Online is a versatile, cloud-based accounting software tailored to meet the needs of small to medium-sized businesses, including specialized sectors like churches requiring unique financial management features.

It is also best for churches that use separate HR and payroll software or that have few employees for whom they must process payroll. Budget constraints are a reality for many nonprofits, making it imperative to consider affordability when selecting accounting software. While it may be tempting to opt for the most feature-rich solution available, it’s essential to balance functionality with cost-effectiveness. Begin by establishing a clear budget for your accounting software investment. While well known to small businesses, many nonprofits need to make extensive customizations and adjustments for fund management experience a lack specific reporting features tailored to their requirements.

Churches that want to save money and error-proof their accounting via easy-to-use intelligent automations should consider Zoho Books. “We love the way Breeze has made everything so simple! In two or three clicks, we can find what we need. As our organization and church grows, Breeze has walked us through each phase.” “Breeze has made our lives much easier! It’s really helped us organizationally as we’ve gotten bigger. Once we made the switch, we had all of our donor and volunteer information all in one place. Breeze just really streamlined everything.” “I love the all in one system that is already implemented and I am looking forward to the new features that are coming down the pike.” With Breeze, you can easily text or email individuals or groups of people – ensuring everyone is in the know about all the things happening at your church.

Church accounting software made for your ministry

Bundle Breeze ChMS with Breeze Worship Tools, Tithely Church Apps, and Tithely Sites for the low monthly cost of only $119/month. “Breeze is so easy to use. The Breeze team set it all up for me so I didn’t have to learn how to do it. The training videos are wonderful. Another wonderful aspect is how fast they are to respond when I need help.” These articles and related content is the property of The Sage Group plc or its contractors or its licensors (“Sage”). Please do not copy, reproduce, modify, distribute or disburse without express consent from Sage.These articles and related content is provided as a general guidance for informational purposes only.

Despite economic challenges, congregations have stepped up to help meet church needs. Sometimes you may have church members perform tasks that they need to be paid for. By using FreshBooks, you will have an accurate time log of how long they’ve worked and can transfer the information over to an invoice when needed as well. Get the tools you need to streamline your business and the insights to drive it forward.

Therefore, it is crucial to conduct a thorough assessment of your current financial processes, reporting requirements, and overall organizational goals. Payroll for clergy involves specific considerations, such as housing allowances and self-employment taxes. The IRS allows ministers to exclude the fair rental value of a parsonage or a designated housing allowance from gross income for federal income tax purposes, though it remains subject to self-employment tax. Proper documentation and approval of housing allowances by the church board are essential for compliance. Non-clergy staff are subject to standard withholding for federal and state taxes, Social Security, and Medicare.

At its core, you have features, like fund accounting, donation tracking, and member management. This trifecta ensures that churches can manage designated funds like missions or building projects, track tithes and offerings seamlessly, and maintain a detailed database of their congregation. Most church accounting software solutions offer integrations with popular ChMS platforms or include built-in donor management features. Look for tools with APIs or direct integrations to sync donor contributions, member information, church accounting software and event data between systems.