Being Critical about Church Contributions
Jul 27
In this time, a lot of churches are being established for people to worship God. Along with worshiping people give donations and contributions to the church so that it can expand and pay its entire monthly bill. Knowing how business works is not enough, because church accounting is a whole lot different than your average business. Businesses don’t accept contributions of and churches do. So working as a church accountant requires flexibility. More than anything it requires knowledge about the different kinds of contributions that the church has been or will be receiving.
Let start with Labor contributions. Labor contributions are just like they sound; a contribution of work given to the church. These value of these contributions should be measured by looking at how much the contribution would have been worth had it been given in the free market. For example if someone provides electrical work as a contribution, then their normal wage rate could be counted as a contribution.
Travel is another contribution worth looking at. If you are asked to travel because your expertise is highly needed in a certain situation and you spent 250 dollars for lodging, the church should make a letter (or voucher) indicating that this is allowed by the church and the person. This way the church keeps good track of its records.
The most common kind of contribution is a cash donation. As is the case with any contribution that is given by the church, the church is responsible to issue a contribution receipt in order to formally acknowledge the contribution given (there are church contribution software packages that will help you with this).
Non-cash donations are more difficult. Churches find it more difficult to issue a contribution receipt because the item (for example a boat, a car, or an airplane) has no readily-available amount, prices vary dramatically for these types of items).
So therefore it is the job of the financial manager of the church to determine how to account for the different types of contributions. Church expenses need to be well-documented so that contributors feel that their money was spent correctly. In addition, donations to the church need to be managed carefully because contributors will want a summary report (generated by church financial software) of their donations at the end of the year for tax purposes.
Related posts: