3 steps to building financial accountability within church staff
Wednesday, September 02, 2015
Do you have to fight to get your children's director to fill out a purchase order? Do you frequently receive requests for large purchases that aren't in the budget? Does the rest of the staff feel like you hold the "purse strings" too tightly?
One possible reason for these problems is a lack of knowledge and understanding of your church's financial picture.
Some church leaders withhold financial information from most of the staff. They don't let anyone outside of the executive pastor or church business administrator know much of anything about the budget or financial health of the church.
This often comes from a place of fear. Fear of criticism in what the church spends money on. Fear of receiving a bit too much unsolicited advice. Fear that department leaders will start jockeying for position when it comes to which one gets a bigger budget.
Admittedly, those are real concerns that could come to pass. However, there's the bigger potential for good that comes from sharing responsibility for church finances with your team. So, how do you begin that process and guard against some of the potential issues? Here are three steps:
1. Involve them in the budgeting process
It's much easier to hold a departmental leader accountable to his budget this month when he was part of developing that budget last year. Also, leaders know best what they're planning to do in the coming year and what that will require financially.
Some ministry area leaders will be more naturally gifted at this than others. If they haven't had much experience in developing a budget, you may need to walk them through the process.
Does any of the sound equipment need to be repaired or replaced within the next year? Does he plan on holding a men's event this fall? Is there a conference she'd like to attend? Work with each leader to develop his ideal budget, then submit it with the others for your annual review process.
2. Review budget vs. actuals with them each month
By the first week of each month, you should be able to run a simple report showing the budget vs. actuals by department. Review that report individually with each department leader.
Ask for explanations on any significant variances (either over or under budget). Use this as an opportunity to remind leaders of events or programs coming up that they budgeted for and confirm if those are still on schedule.
Part of this is to educate and hold the leader accountable for his/her budget. This also can help you with cash-flow forecasts and planning purposes.
3. Review the big-picture budget vs. actuals monthly
You've reviewed the individual department budgets, but how is the church doing financially as a whole? Are you over budget, on track or under? Is one department causing the majority of the overage? If so, is that overage reasonable considering the circumstances? Can other departments help make up for that overage?
Review the big picture with at least all department leaders. They should know how the church is doing so they can be part of the solution or rejoice together that things are going well.
Now, if you're reading these tips and are concerned your departmental leaders aren't mature enough to handle this, I'd question whether they're mature enough to lead a department. Expect them to handle this information with wisdom and maturity — most people will rise to your level of expectations. Don't discount them before you've even given them a chance to prove they can handle the responsibility.
Involving leaders in the process of developing and monitoring the church's finances instills a sense of responsibility within them. Asking for their input, holding them accountable and letting them participate in guiding the church's financial health builds buy-in and trust — and helps them understand why you're such a stickler about those pesky POs.
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