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What should our church use to keep the books?

Question:

What bookkeeping system should our treasurer use to keep the church books?

Answer:

The bookkeeping system used by a church must be compatible with current and future treasurers’ training and experience. To adopt a system that is overly complex or suitable for only a highly qualified bookkeeper may create grave difficulty when there is turnover in the treasurer’s position. The following are several solutions that small local churches have found useful:

1. Accounting software. Intuit QuickBooks Desktop or Online and Sage (formerly Peachtree) are two general purpose accounting software packages. There are some church/ministry specific systems, such as Shelby Systems. These more specific software options tend to be more costly but also tend to have the features that the others do not. 

All these software options offer government reporting, payroll processing, donor management, bank reconciliation tools, use of bank feeds (downloading transactions), budgeting, and many others features.

Costs for these software options vary (e.g., QuickBooks Online is a monthly subscription). We recommended researching which option is right for you. Techsoup.org or purchasing QuickBooks online through a QuickBooks Pro Advisor may allow for some potential cost-saving benefits.

Previous formal training in bookkeeping or considerable on-the-job training will be required for use of accounting software.

2. "Old school" bookkeeping. Electronic cash receipts and cash disbursements journals (e.g., MS-Excel, Google Sheets). The treasurer uses two separate worksheets with columns for the amount of each bank deposit or electronic transfer (in the cash receipts journal) or for the amount of each check or electronic payment (in the cash disbursements journal). Additional columns are used to record the transaction (receipt or disbursement) into categories consistent with the accounts presented in the church budget.

Each month both journals must be reconciled to the bank statement. The beginning account balance, plus the total receipts, less the total disbursements, must equal the ending account balance. If the amounts do not match, this indicates a mistake, and should result in the treasurer going back through the journals to find the mistake. Periodic reports may be prepared based on summarizing the month-end totals of the journals. 


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