8 Practical Tips for Enhancing Your Church Finances

Taking charge of the church’s financial health and managing your church’s financial resources can be a challenging and intimidating assignment. If you are reading this article, there is a good chance you have been tasked with improving church finances. While this is often an unacknowledged endeavor, it is a vital part of any healthy church, and church members and church leadership will truly appreciate your efforts.

Whether your church is struggling financially or just looking for ways to free up more money for a particular ministry, the following tips should help you implement an optimal church budget while ensuring that your church is financially healthy.

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Best Practices for Managing Church Finances

1. Master the Budgeting Process

The old adage “You have to learn to walk before you can run” is spot-on when it comes to managing and improving your church’s finances. In order to streamline your budget and overcome the financial challenges of your church, it is imperative to have a clear understanding of the basics of budgeting and how the budget applies to your church’s specific situation.

An excellent place to familiarize yourself with the expenses, resources, and overall finances of your church is to review the last two to three years of financial statements. These documents will give you a general overview of the budget, and they should also help you spot any troubling trends when it comes to giving, saving, spending, etc.

2. Offer a Recurring Giving Program

One of the many challenges of creating and managing a church budget is the uncertainty related to monthly giving. One way to combat this is through online giving platforms that make it easy for church members to set up recurring tithes. There are some excellent options out there to help improve church finances, and automated giving is definitely one of them.

Automated Giving Can Boost Your Church’s Finances

Online giving is a consistent and predictable source of tithing. Typically, church members who sign up for recurring giving donate more often and donate more giving units annually than those who tithe in other ways. Also, members who set up recurring donations give up to 42% more per year than those who give one-time contributions.

3. Mention Giving Often Within Your Church

As previously mentioned, creating streams of consistent giving is one way to provide more breathing room when it comes to your budget and your church finances as a whole. One often overlooked way to increase tithes and offerings is to mention giving more regularly when it is natural to do so. 

Here are some common methods to organically discuss church giving:

• Find ways to bring it up during a sermon when it appropriately works with the passage you are preaching on
• Include data about attendance and contributions in your weekly updates to your church leaders so you have a logical segue to a discussion about giving
• Have pastors or leaders include the benefits and importance of giving when discussing news, church stories, and member-related emergencies from the stage

4. Review Your Church’s Finances on a Monthly Basis

It never hurts to have some additional eyes on the finances and budget of your church, particularly when those people know what to look for. Internal controls, such as this one, go a long way toward establishing financial integrity, and they also help eliminate any errors or opportunities for financial improvement that may have slipped through the cracks when running your individual assessment. If possible, include all pastors and any other key leaders in your review sessions so you can maximize your chances of cutting spending and generating cash for your ministry.

5. Have an Independent Audit Performed

If your church has the attendance, corresponding contributions, and budget for an external audit, it is an excellent idea. While the average cost can run between $4000 and $15,000, the findings from the audit may reveal inefficiencies with your current accounting procedures that could save the church significant amounts of money over the long haul. An additional benefit is the added accountability that will protect your church from any legal issues with the IRS.

6. Build up a Cash Reserve as a Safety Net

While the majority of the tips here are meant to provide more breathing room when it comes to your church funds, this tip is less about increasing your funds and more about reducing stress when something unexpected occurs. Having money saved up for unforeseen circumstances is a sign of financial health, and it can really put members and leaders at ease knowing there is an emergency fund in place. A study performed by Christianity Today’s Church Law & Tax Group found that on average, ministries are putting at least 2% of their annual budget toward cash reserves. Your church may need to set aside more.

7. Hire Staff Members With Accounting Experience

Quite often, a leader in the church will proactively volunteer to tackle the chore of managing the church’s finances, which is admirable but not always necessary. Depending on the size of your church, you may have a former or current accountant who attends, or perhaps there is a person within your congregation who is very proficient when it comes to accounting. Sometimes all it takes to find them is a simple announcement at the next service or a short blurb in your weekly bulletin.

In a perfect world, you would find a member who is eager to volunteer their time and expertise, but that may not always be realistic. The next best alternative may be to hire someone to assist with managing your church’s finances. While this would require dipping into church resources, it will be money well spent since it will free up others for more pressing projects and tasks, and put your church finances in the hands of an experienced accountant.

8. Use Accounting Software That Is Specifically Created for the Unique Needs of a Church

There are many accounting software options available, but just a small percentage are designed to efficiently manage a church’s finances. It can be done with programs like QuickBooksⓇ, but why take 10 complicated steps to do something that should only require a few simple steps?

Aplos was created to address the specific accounting needs of churches like yours. Our award-winning software gives you the power to track tithes, budget by fund, run customized financial reports, and easily utilize and track online giving. It includes all of the essentials needed to manage church finances but without the hefty price tag.