The Silver Lining to Cloud Based Ministry
By: Rebecca M. DaVee
Let’s face it; ministry is at work 24/7, 7 days a week, 365 days a year. Ministry leaders are on the go, every day, every month, year after year. The cost of doing ministry is rarely confined to the sanctuary, the nursery, or choir loft. However, if you open the door to the accounting office, the cost of doing ministry is everywhere: filing cabinets are crammed with vendor invoices, inboxes stacked with delinquent credit card receipts, bank statements waiting to be opened, and bank reconciliations waiting to be reviewed and approved.
All of these scenarios are possible and are becoming a reality for many churches. By accessing the cloud with an Internet browser, each ministry worker can submit, view, review, approve, and process financial data anytime, anywhere, on any device.
The ‘cloud’ is simply defined as a network of servers and storage. If you have ever searched for information using Google or connected with your friends through social media, you’ve just accessed the cloud.
The cloud has become more and more attractive to churches and ministries for the same two factors that hinder the ministry: time and money. For years, ministries have purchased software and equipment, bought more servers, retained personnel to maintain said equipment, and processed data on premise. The equipment soon becomes obsolete. The software must continue to be periodically upgraded (typically with fees). The data must be secured and backed-up.
Lastly, personnel costs continue to rise. By utilizing the cloud, churches pay only for what they need, when they need it. Let’s review the church’s financial transactions and cloud considerations.
Contributions serve as the backbone for the operating budget. Tithes, offerings, and pledge payments represent the inflows which support ministry activity outflows. These funds are collected weekly during the service(s), delivered via the postal service, donor authorized ACH withdrawals, and on-line giving. Today’s donors are sophisticated, wanting online access to their giving records and statements. Because of social media, members are accustomed to connecting with other congregants, planning events, fellowship groups, and ministry activities.
What are the important considerations in looking at a cloud-based service provider?
Typically, the largest expense incurred by churches relates to payroll and related taxes. Tax laws and HR regulations are complex, and churches have utilized industry experts for decades.
Whether you process payroll manually or with premise software, consider the following when looking for cloud-based HR and payroll providers:
Whether you are processing utility payments or sending missionary support oversees, funds must be moved from one owner to another. How many times does the accountant physically touch this type of transaction? The traditional disbursement process includes a purchase order, third-party invoices, or a check request and a signed bank draft, commonly referred to as a check.
Today, the word check has a whole new connotation allowing users (via a mobile application) to pay bills and track bank, credit card, investment, loan transactions and balances. By remitting your vendor invoices to a third-party processor, your source documents are electronically stored reducing the need for on-site storage, maintenance and insurance. Invoices can be submitted, reviewed, approved, recorded, and paid; all electronically. The audit trail of “who” performed “what” can be substantiated and verified.
Let’s look at the important factors in a cloud-based solution:
When using the bill pay service, one of the time-saving efficiencies is that the service provider tracks the vendor payments that have not been deposited. Bank reconciliations become streamlined and efficient because the number of reconciling items is significantly reduced.
The question we should be asking ourselves is how can we reduce the stress for ministry leaders and accountants and, more importantly, simplify the record-keeping process? By utilizing a cloud-based processor for capturing and storing receipts, uploading, reconciling, approving, and paying the monthly credit card statement. The same factors considered for vendor payments are applicable to credit card processors.
Excluding security, customer service and training, what is the other constant factor mentioned above? Integration within the financial software (i.e., general ledger) of the cloud-based accounting platform. By using an Application Program Interface (API), the other cloud-based systems (contributions, payroll, vendor and credit card payments) can seamlessly update the accounting records. To streamline all of your financial processes, you want all of your systems integrated (communicating) with your general ledger. Is this pie in the sky? Absolutely not.
The cloud is a simple, efficient, and secure way to access any information at the push of a button. With the cloud, ministry leaders, employees, and volunteers have access to relevant information anytime, based on user permission. The cloud offers added security that your financial information will never be lost in a natural disaster or computer malfunction. Through the use of the cloud, ministry leaders can be connected to their information at the church office, at home, or anywhere they have their mobile device.
Becky DaVee, CPA is a partner at Salmon Sims Thomas & Associates, www.sstcpa.com.