Cash Flow

The Church Board is entrusted with responsibility to manage the affairs of the church, including the financial resources (money). The treasurer does not control the finances, but is the person primarily responsible to ensure that the details of financial decisions are carried out.  Church finance best practices require that, the treasurer, staff or an outside hired accountant/bookkeeper, or a volunteer will need to keep track of how many donations your church receives (revenue) and how much money your church spends (expenses).

Tracking and maintaining a good record will help make completing annual government forms (like the T3010), GST/HST rebates and be ready for any audit or financial review.

It is very important that all church funds be handled carefully and with integrity.  The bank reconciliation should be completed monthly. In simple terms, this is reconciling or balancing the church accounting records to the bank statement or records.  Getting into a routine helps keep your books up to date. If you treat each month like a ‘year-end’, then the year-end report is simply another month-end report.

Monthly budgets take the annual budget and divide by 12.  However, this does not take into account seasonal dips in giving (like over summer months) or highs (like year end giving at Christmas).  These highs and lows effect the church’s cash flow – how much and when funds are available for ministry spending.

To determine historic cash flows, take the monthly  giving and expenses reports over the course of a year.  In your currently monthly reports, add a column that compares the current month to the same period last year. At the monthly board meetings, church leadership can ensure that spending is in line with expected fluctuations in cash flow.  Their goal is that expenses do not exceed incoming finances (and reserves) so that ministry can thrive in your church.

 

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