A church is often thought of as only being a house for worship. There is so much more that goes on behind the scenes of a church. The behind the scenes stuff is how it keeps its doors open to its flock. Since churches are not taxed but they collect donations and other funds, they must follow strict tax-exemption guidelines.
One way to ensure all financial aspects of a church operate optimally is to integrate all monetary details through accounting software. Software can automate several of the repetitive tasks. Here are a couple of things to consider.
Why is Software a Popular Solution?
The strides that software industry has made has a lot to do with the increase in usage of the internet and innovation in technology. After the dotcom crash of the early 2000s, the industry has managed to bounce back and not repeat their mistakes. The internet and technology crowd have always believed in making humans more efficient. If repetitive and low-level tasks could be automated, it would free up resources. Those resources could be redirected to more profitable areas. The goal is also to reduce human error.
Does Software Help Meet A Church’s Legal Financial Standards?
The right software for church accounting will help the organization meet legal financial standards easily. Financial laws tend to change, or at least see adjustments, every year. The changes can be difficult to stay on top of with, admittedly. If laws change, updates to make adjustments to your program are rolled out. Churches do not have file tax returns because they are given public charity status and labeled as a 501(c)(3) organization. To keep this status, the organization must meet the guidelines every year. The church cannot be run for private interests and can receive tax-deductible contributions. As funds are received, the amounts and their purpose should be recorded in the software. Everything is categorized and added up for you. When the tax filing date rolls around, the software can compile the necessary information to be mailed in with the appropriate form to the IRS, usually a Form 990.
Can Software Integrate with Current Applications?
Designers and developers of church accounting software understand that users often already have a system they use. The designers and developers take a look at popular applications and build their software in a manner that allows for integration. This helps with data migration, too.
What Tasks Can it Accomplish?
Some of the features that accounting software for churches can execute includes bookkeeping, accounting regulation standards and the ability to compile reports. If there is a fundraising effort occurring for a mission trip, an addition to the property or an expansion, there are tracking features that will alert you when the goal has been reached. A complete picture can also be painted that includes profit and loss statements as well as cash flow, account reconciliation and vendor statements.
How do I Acquire the Right Software?
There is no shortage of options here. Speaking with other church leaders and asking for a recommendation is one way to gain insight. Reviews are also helpful.
How do I Justify the Cost?
Software is an investment. There are enough varieties available that fit all budgets. Sometimes, there are discounts available for public charity organizations. If there are any costs, they are made up through efficiency and improved use of resources.
Leading a church or being tasked with the financial duties and the health of the organization are important roles. Software has become a popular solution that drastically reduces the amount of time spent on repetitive tasks so resources can be better utilized in a more productive capacity.