Church Bookkeeping in Kentucky

A business has one pot of money. A church has a dozen. The building fund, the youth trip, the benevolence fund, the missions offering, the memorial gift somebody left for new pews. Each of those was given for a purpose, and the people who gave expect it to be spent on that purpose. Keeping those funds straight, month after month, is most of church bookkeeping.

Then there's payroll. Ministers are taxed differently from everyone else on staff, housing allowances have rules, and a mistake can cost the pastor personally at tax time. And at the end of the year, every giver needs a contribution statement that's right.

I record the offerings and expenses, keep each designated fund on its own line, reconcile every bank account, run payroll, and send the finance committee a report that shows the general fund, each designated fund, and budget versus actual with a short note on anything that moved. At year end I produce contribution statements and the W-2s.

If the church uses a volunteer treasurer, I work alongside them. Usually the treasurer keeps signing authority and oversight, and I take the monthly grind off their hands.

Good controls aren't about distrust. They protect the people handling the money from ever being questioned. Two unrelated people count the offering. The person who writes checks doesn't reconcile the bank statement. Somebody on the committee sees the bank statement every month. I set these up in a way that fits a small church, not a corporation.