How the Right Church Accounting Software Can Enhance Your Internal Controls
By: Christy Qualle
Religious organizations focus on the spiritual, but they are not exempt from the business task of financial bookkeeping. Keeping track of where money comes from and where it goes is essential in ensuring the stability and seamless operations of your church.
Implementing accounting practices with strong internal controls in churches is an essential discussion to protect the integrity and finance of the organization. It is also not entirely uncommon for churches to close its doors or cut back on its social services because its finances were not properly managed.
It cannot be denied that when money is involved, temptation is also present. Even if you prefer to assume that everyone who works for the congregation is honest and trustworthy, what cannot be assumed is that everyone knows how to properly account for the church’s assets and finances.
The church leader alone cannot be expected to micro-manage the church’s finances. This person may be a great leader, but not great at finances. Plus, there are some essential internal controls that should be implemented so the pastor, or anyone in charge of the finances, does not fall victim to financial mismanagement.
Internal control systems are essentially safeguards that you can establish in your organization to protect its assets and finances. Every section of your organization that deals with finances, such as collecting tithe or paying maintenance costs, should have an internal control process that defines the goals, risks and activities necessary to achieve the goals. When you put all the sections together, you then have an internal control system.
This is where advances in technology become a welcome source of protection, control and efficiency. Using the right church accounting software can greatly increase the effectiveness of your internal controls.
Do You Need Internal Controls In Your Church?
Protect your assets.
Increase trust within your church.
Demonstrate good stewardship.
Internal controls aren’t only important in businesses and corporations. It is an essential puzzle piece wherever money is involved. There are two kinds of internal controls that you should take note of:
Preventative controls can also vary in scope, depending on how big your church is or how many people you want involved in your church finances. For example, blank checks can only be valid if signed by one of your high-ranking clergymen. These blank checks will then be kept in a combination safe that the signee has no access to.
What Internal Controls to Look for in Your Accounting Software
Here’s how a church accounting software can help:
Segregation of Duties
Customized Permission Levels
Financial Statement Review
Avoid Alteration of Transactions
Good accounting practices begin with having effective internal controls in place. Once you are able to create a foundation of financial checks and balances to ensure proper money and asset management, then you’ll be able to ensure that your funds are being distributed responsibly. Using the right church accounting software can make your internal controls run more efficiently and it can greatly increase the accountability of your staff and the transparency of your transactions.
As the leader of your church, it is your responsibility to know how donations are being used. An accounting software is a small investment that you can make to help you stay on top of your church finances. It will also give your staff an opportunity to use reliable tools that will protect them from bookkeeping errors, as well as temptations to use church funds for their own purposes.
The right accounting software will be able to help you in enhancing the internal controls that you have established for your church. The easy-to-use program will ensure that you won’t have to spend more time poring over your church’s financial statements than necessary, leaving you with more time to spend with other important church matters that need your attention.
Christy Qualle is director of communications at Aplos Software, a developer of church accounting software, www.aplossoftware.com.