The Importance of Church Financial Software, Explained
The coronavirus pandemic caused many people to have a new outlook on life. They’re changing jobs and making time for their families.
Churches across the country had a similar wake-up call. Church leaders had to get creative to remain connected with parishioners.
Church financial management came to the forefront and turned to church financial software.
They had to cope with the severe drop in donations. Only 40% of churches had enough cash to make it through the first few months of the pandemic.
Managing church finances doesn’t have to be a struggle profit and loss statements. You just need to have the right systems in place. Read on to learn more about church financial software and what it can do to make church management easier.
1. Make Strategic Decisions
Does your church have a vestry? This is a group of laypeople who serve the church. They’re similar to a corporation’s board of directors.
They work closely with the church staff to manage the financial health of the church. They meet regularly to ensure the various ministries of the church fulfill the mission of the church.
They can’t adequately fund or create budgets for the ministries if they don’t know the financial situation of the church.
Tracking church finances is difficult if you rely on spreadsheets. When you use financial software for churches, you have an accurate financial picture.
Everyone can make better strategic decisions to ensure the church performs its role in the community.
2. Handle Event Payments With Ease
Do you dislike church events? They’re essential to creating a connected community, but they are hard to organize. The challenging thing is managing event payments.
You don’t want to turn anyone away, but events are a significant revenue stream for the church. There is a way to make events easier.
Church financial software platforms like Icon Church Management allow parishioners to pay for events online. It makes it much easier for you to plan events and accept payments.
3. IRS Compliance
Churches do have one major benefit. They don’t pay federal income taxes. That doesn’t mean that they can’t be audited by the IRS.
The IRS has limited authority to conduct audits, but you need to be prepared to show your records regardless. Accounting software for churches makes sure that you’re IRS compliant.
Not only can you manage an IRS audit, but you can avoid bad PR for your church.
Some churches manage finances in a way that gives all churches a bad name. You see pastors that are multi-millionaires with private jets. There are other churches that take political stands.
There are journalists and watchdog groups eager to expose churches as financially negligent or corrupt. This isn’t a fair assessment of your humble church, but it is a reality that you have to deal with.
How can church financial software help you ward off these groups? You have a better sense of your financial position. Plus, it’s much easier to provide detailed reports of your finances on demand.
4. Necessary for Outside Investment
Church leaders have to find ways to rebound from the pandemic. One of the easiest ways is to get a loan, grant, or outside investment.
The outside investment gives you financial breathing room as the congregation returns to in-person services and regular giving.
You have to show your financial records in order to receive outside investment. Banks and grant applications ask for your profit and loss statements. They also ask for financial projections.
A software program keeps your records organized, so those records are easy to produce. No need to spend hours creating spreadsheets.
5. Built Trust With Your Congregation
You probably tell your congregation that they need to be good financial stewards. That they’re blessed with abundance and should share that wealth with the church.
Church financial software allows you to practice what you preach. You can demonstrate good financial stewardship by providing regular reports of church assets, income, and expenditures.
The church community sees that the leadership team values their contributions. That builds trust and encourages them to give more.
Churches have to be aware of the number of security threats out there. Hackers spoof church email addresses and ask parishioners to make a donation.
They also try to capture sensitive information like credit cards, addresses, and names. These items are sold on the dark web.
Churches that rely on outdated accounting systems are at risk of exposing these records. The best way to avoid this is to get a secure software program.
7. Keep Parishioners Engaged
Do you have parishioners that appear for a few services and disappear for a while? Church financial software allows you to track giving at the individual level.
If you see a parishioner that hasn’t participated in events or giving in a while, you can reach out to that parishioner personally.
How to Choose Church Accounting Software
If you’re ready to shop for a software suite, start by analyzing the needs of the church. What are the most important features you need?
You might need a financial platform that allows you to have multiple users. You might need an integrated communications tool.
Be sure to keep your budget in mind. Church management platforms are affordable, but you don’t want to sign up for a platform that has features you don’t need.
Finally, see how easy it is to use. You want something powerful, yet simple enough for everyone to use without issue.
Do You Need Church Financial Software? Yes, You Do!
You and your church staff no longer have to rely on spreadsheets and antiquated systems to manage your church finances.
Church financial software helps you and your team take the guesswork out of tracking church finances. The vestry can make better decisions and your parishioners trust your stewardship. Most of all, your church stays out of the watchful eye of the IRS and watchdog groups. Be sure to read the other articles on the blog for more financial tips!