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When the Church Finances Get Too Much for Volunteers

Question:

A New York City church has been handling all its church finances through volunteers, but the work is getting overwhelming. It is considering hiring an outside firm/person to handle all church finances- reimbursements, writing checks, payroll, bookkeeping. Is this a good idea? What is a reasonable price?

Answer:

The bookkeeping function for volunteers has always been, in my opinion, the most time-demanding volunteer responsibility in most churches. When most churches reach a point of advanced time and expertise requirements they seek to hire help rather than to continue using volunteers.

Of course, some functions cannot nor should be "farmed out." The confidentiality and security required for offering counts and deposits typically means that volunteers will continue performing these duties. Maintenance of donor records often stays under the watchful eye of church members. Of course, processes to approve invoices for payment and to set compensation arrangements must be overseen by the church leadership, as does creation of the church budget. So church member expertise is still much needed.

It's good to ask potential part-time employees or bookkeeping service providers whether they have experience in accounting for churches, particularly payroll functions since there are significant differences between churches and business enterprises. Often, experienced people are not available so a new hire must be expected to do some research to learn about ministerial compensation. As many have discovered in this blog, there are some tips along the way here, but a good general resource may be helpful. Type "tax" in the search window of Christianbook.com and you will find helpful resources by B.J. Worth and Dan Busby. Check out Churchlawandtax.com as well.

Further, the new employee or self-employed bookkeeper may not be familiar with the church's method of financial reporting--typically, an "Other Comprehensive Basis of Accounting." The individual must have a solid understanding of accounting in order to avoid attempting to convert the ministry to his or her own limited sphere of experience in for-profit business accounting.

As to reasonable pricing, each geographic area has its standard of living that a church must consider. Volunteers who have performed financial services in the past may be able to suggest the amount of time it will take to fulfill the work. Then, local wages rates must be considered. Typically, independent firms must charge more but will have their own computer systems and will have access to greater expertise. These all are matters that must be considered.

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