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Why Outsource Your Church Accounting? 3 Reasons

While many churches may hire someone to handle the accounting functions in-house, another option is to hire an outsourcing company.

Leading a church involves all we typically think of as “pastoral” work plus a plethora of behind-the-scenes tasks. One significant responsibility of church leadership is to be an excellent steward of church finances. As people tithe, they’re trusting the church to use that money wisely.

To make that happen, you need strong financial controls and processes in place. While many churches may hire someone to handle the accounting functions in-house, another option is to hire an outsourcing company to reconcile accounts, provide financial reports, pay bills, manage payroll, record weekly giving, and more.

Why should you consider outsourcing?

Reason #1: Expertise

If you hire an outsourcing company that works with several churches, you’ll benefit from that breadth of experience. They’ll be able to tell you what’s worked well for other churches in setting up restricted funds, establishing an annual budgeting process, and how to pull financial reports together for lenders. You may also be able to leverage the knowledge of CPAs along with having someone handling the day-to-day bookkeeping.

Reason #2: Reduced fraud risk

Unfortunately, churches aren’t immune to theft. There are several examples of employees stealing from the church. One way outsourcing can help prevent theft is by ensuring segregation of duties. For example, an outsourcing company will have processes that require that the person who can create a new vendor within the accounting software is not also able to approve an invoice for payment or sign a check. This keeps an individual from creating a new (fake) vendor, entering a fake invoice, approving it for payment, then signing a check to pay that invoice.

Reason #3: Increased focus on finances

Let’s face it – there are many instances in the schedule of a church where it’s “all hands on deck.” Every staff member, regardless of function, gets pulled into finishing up Christmas decorations or setting up for an event. When an outsourcer handles the accounting functions, you’re able to maintain focus on church finances no matter what you’re dealing with at the church.

Before you hire an outsourcing company to handle your church’s accounting, take the time needed to evaluate potential vendors carefully.

Here are several questions to ask:

· Does this company focus on serving churches?

· Do they have church clients of a similar size as yours?

· How long has the company been in business?

· What are the qualifications of their accountants and/or bookkeepers (Bachelors in Accounting, CPA, etc.)?

· What accounting software do they use? Will they use what you already have?

· How will you send and receive information such as bank statements, financial reports, invoices, etc.?

· How do they plan to keep their clients’ financial records and information secure (both electronic and paper records)?

· What does their new client on-boarding process look like?

· How often will they provide financial reports to you? What reports will they provide?

Outsourcing your church’s accounting can free up time to focus on front-facing ministry tasks, ensure proper financial processes, and reduce potential fraud. If you’re considering outsourcing, take your time to find the best vendor for your church and establish an excellent relationship from the start.

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