Leadership

How Financially Fit is Your Church? 5 Keys to Monitoring Financial Health

Running a church financially requires savvy—developing a higher level-of-understanding in these areas will help you lead, better.


Deborah Ike  ·  March 27, 2018

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Running a church financially requires savvy—developing a higher level-of-understanding in these areas will help you lead, better.

Among the most common frustrations Thom Rainer, president and CEO of LifeWay Christian Resources hears from pastors, according to his recent blog post are, “Expectations to understand the business and leadership side of church life,” and “I have no idea about some of the financial decisions I’m supposed to lead at church.”

“Seminary did not prepare me for this.” If you don’t have an executive pastor or church business administrator on your team, you may feel like you’re trying to wear too many hats…and some just don’t fit. While the senior pastor doesn’t have to be an accounting expert, you do need to know a few basics so you’re prepared to make wise financial decisions.

Much like your doctor will look at your blood pressure, heart rate, temperature and other vital statistics to check on your physical health, financial reports provide insight into your church’s financial health.

You need to know where money is coming from and how much. You also need to know where money is going, for what purposes, and how much.

Developing a plan for income and expenses each year, plus monitoring that plan throughout the year is also part of good stewardship. As executive pastor David Fletcher wrote, “Financial reports tell the implementation, or lack thereof, of a church vision statement.”

With that in-mind, here are five key areas that having at least a high-level understanding of will help you lead your church:

Key #1 – The Chart of Accounts
The foundation of your church’s financial information is the Chart of Accounts. This is a list of accounts for categorizing income and expenses. Income accounts could include “Tithes”, “Special Offerings”, “Bookstore Sales”, “Event Tickets,” and more. Expense accounts may include “Salaries,” “Building Maintenance,” “Mortgage/Rent,” “Office Supplies,” etc.

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ARTICLE TOPICS

Leadership · Management · Blogs & Opinion · Administration · Financial · All Topics

ABOUT THE AUTHOR

Deborah Ike
Deborah Ike (formerly Wipf) is the President & Founder of Velocity Ministry Management; a company dedicated to vision implementation for church leaders. Over the last ten years, Deborah worked in the corporate arena to discover how to leverage business principles for ministry vision. She worked for Deloitte Consulting in their Strategy & Operations group and most recently, for Williams, as a project manager and risk manager. Deborah has a bachelor’s degree in Computer Information Systems along with the Project Management Professional (PMP) credential from the Project Management Institute. She’s the author of The Volunteer Management Toolkit (Church Edition) and you can find her articles on sites such as Pastors.com, XPastor.org, WorshipFacilities.com, and via The Church Network.
Contact Deborah Ike: deborah@velocityministrymanagement.com ·  View More by Deborah Ike


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COMMENTS

By neiljakson on April 2, 2018

Hi, Financial health is a term used to describe the state of one’s personal financial situation. There are many dimensions to financial health, including the amount of savings you have, how much you are setting away for retirement and how much of your income you are spending on fixed or non-discretionary expenses.buy dissertations online 

COMMENTS

By Falcon Thomson on March 29, 2018

I have no idea about some of the financial decisions I’m supposed to lead at church.

Thomson, mangafox