Should My Church Outsource The Bookkeeping?Many churches wonder whether or not to outsource their bookkeeping. Congregations everywhere are trying to ensure their financial system is accurate and safe.  Church fraud and embezzlement continues to be a rapidly growing challenge.  Brotherhood Mutual, a church insurance company shares some shocking statistics that Church Fraud now exceeds what churches give to mission work.

“Increasing at an annual rate of nearly six percent, researchers expect church financial fraud to reach the $60 Billion mark by 2025.”

The fact is churches are prime targets for fraud.  Why?  First, churches don’t exchange goods or services for the money they receive (no inventory to track).  Second, churches tend to be an organization with an unusually high degree of trust.  Also, churches tend to lack internal controls.

“”Nobody wants to believe that the person they trust, the person they respect, is stealing from them,” said Sizemore. “But that is exactly what I’m seeing in our practice.”  Each year, Forensic Strategic Solutions receives 3-4 cases of a church or nonprofit that has discovered or suspects fraud.  Typically, when they investigate, they find few if any accounting controls and most financial procedures in place are based on ‘trust.’”
– Alton Sizemore, forensic accountant in a 2013 Forbes article

Why Should A Church Consider Outsourcing the Bookkeeping?

So why consider outsourcing?  For some smaller to medium sized churches, having an outsourced bookkeeper can increase expertise & accuracy, lower bookkeeping costs, and provide a missing link in internal controls.  Let’s take a look at these one by one:

The cost of having someone on staff for bookkeeping in a small church often means combining the role with another role to make the job enticing enough.  For other churches, it means hiring someone part-time who may not have a great deal of experience.  Yet, for many others it means asking a volunteer treasurer to maintain the accounting.  Hiring someone who is trained and does bookkeeping for many organizations means they can give you higher quality work at an affordable price.

Accuracy and expertise are critical for good financial health in any organization.  Having a trained and qualified bookkeeper means having an expert who knows the right way to make entries, understands and complies with local and federal requirements, and ensures your reporting is accurate.

Internal controls are a key area where churches are at risk.  Having someone outside of the financial system reconciling your bank accounts, tracking and verifying your deposits and checks means there is a second set of eyes going over all of your system, increasing the safeguarding of your congregation’s resources.

No two churches are the same.  The needs of each church vary due to size, availability of volunteers, resources, and staffing abilities.  In partnership with ChurchWest Insurance, the Church Training Center offers several packages to help churches with exactly what they need from managing your financial system to coming alongside and helping the one that is in place.  Here are three of their packages:

Congregation CFO Package

Have an expert maintain your financial system, provide you accurate financial statements, and meet with you quarterly to help you maintain your financial health.  Ensure your congregational leadership understands their role as a governing body.  Receive coaching on the development of individualized financial controls and procedures that safeguard your resources.  Receive expert analysis of your budget and have help just a phone call away.

  • Prepare monthly financial statements, including income statement with comparisons to budget and prior year, balance sheet, and cash flow statements.
  • Maintain church accounting, recording all transaction, reconciling bank accounts, and providing contribution receipts to donors.
  • Tax reporting.
  • Provide governance training seminar for church leadership.
  • Provide fraud prevention seminar for church leadership.
  • Customized financial policies & procedures coaching.
  • Review and assist with classification of employees vs. independent contractors.
  • Quarterly video-conference to review financials, fund raising efforts, and operational issues. The objective of these meetings will be to identify areas that need attention and develop action plans designed to strengthen the church.
  • Review and make recommendations regarding church’s annual budget.
  • Telephone hot line – Contact us with your questions regarding church finance, administration, or governance questions.

Congregation Controller Package

Have an expert maintain your financial system, provide you with accurate financial statements, and meet with you quarterly to help you maintain your financial health.  Ensure your congregational leadership understands their role as a governing body.  Receive expert analysis of your budget and have help just a phone call away.

  • Prepare monthly financial statements, including income statement with comparisons to budget and prior year, balance sheet, and cash flow statements.
  • Maintain church accounting, recording all transaction, reconciling bank accounts, and providing contribution receipts to donors.
  • tax reporting.
  • Provide governance training seminar for church leadership.
  • Review and assist with classification of employees vs. independent contractors.
  • Quarterly video-conference to review financials, fund raising efforts, and operational issues. The objective of these meetings will be to identify areas that need attention and develop action plans designed to strengthen the church.
  • Review and make recommendations regarding church’s annual budget.
  • Telephone hot line – contact us with your questions regarding church finance, administration, or governance questions.

Financial Advisor Package

Have an expert review your financial system monthly and prepare your statements for you.  Receive quarterly analysis and help in developing action plans to maximize your potential.  Receive expert analysis of your budget and have help just a phone call away.

  • Prepare monthly financial statements, including income statement with comparisons to budget and prior year, balance sheet, and cash flow statements.
  • Quarterly video-conference to review financials, fund raising efforts, and operational issues. The objective of these meetings will be to identify areas that need attention and develop action plans designed to strengthen the church.
  • Provide governance training seminar for church leadership.
  • Review and assist with classification of employees vs. independent contractors.
  • Review and make recommendations regarding church’s annual budget.
  • Telephone hot line – contact us with your questions regarding church finance, administration, or governance questions.

These preventative tips can help your ministry reduce the risk of church fraud and embezzlement, which will help it remain distraction-free and effective as you work to further the Kingdom and serve your communities.

Have questions about outsourcing your church’s bookkeeping? We’re here to serve. Just drop us a line and we’ll reach out to help.

Does your church have an internal or outsourced bookkeeper? Has it helped your ministry stay accountable when it comes to finances?

Let us know about your experiences with outsourced bookkeeping on Twitter or Facebook. You can also share this with a friend by clicking the share button, below.

We’re always ready to have a conversation on how we can all work together to preventing Church fraud and embezzlement.

Portions of this post were used with permission from Keith Clark-Hoyos and the Church Training Center. You can read the original post, here.