Though it isn’t impossible to do, having accounting software designed for churches will help organize everything finance-related. The best church accounting software offers full accounting functionality at affordable nonprofit prices. In the end, we selected the 10 best church accounting software of 2024. Churches are exempt from paying income tax while businesses do pay these taxes. Your church wants to make the world a better place by investing time, resources, and funds into the community, so the government chooses to credit organizations like yours with certain benefits.

For instance, a well-oiled church accounting machine can adapt to (and take advantage of) online donation methods. It can implement current options, like text-to-give and QR codes, and can continue to integrate whatever cutting-edge future giving options develop over time. A church might be able to operate as a non-profit, but it is still a legal entity in the eyes of the state. This government status requires church leaders to adhere to certain rules and regulations, such as filling out the right forms at tax time and keeping their books clean enough to pass muster in the event of an audit.

Parable Church Accounting and Bookkeeping’s Financial Toolkit

Technology makes it easier to communicate finances with the congregation. Churches exchange yearly reports, budgetary details, and frequent financial updates with their members via email, websites, or mobile apps. Members of the congregation are more engaged and build trust due to such transparency since they have access to how their contributions support the church’s mission and ministries. Many churches have a designated financial committee or board that oversees financial matters. Members of the financial committee have a solid grasp of the church’s financial requirements or have experience with finances.

As we mentioned, very few church professionals entered the industry to start their accounting careers. Rather, your industry is full of individuals who feel called by God to serve their communities and spread the Word. Therefore, you’ll likely look for outside sources to handle the accounting tasks at your church.

Principles for Effective Church Administration

For churches, this is the emphasis on accountability of where money is going versus profitability. According to purpose, it groups assets and liabilities, which makes donations, or revenue, restricted in their use and can only be distributed for their specific purpose. For example, if a church accounting church is hosting a giving campaign to raise funds for a new building project, any of the money received specifically for this project can only be used for this purpose. The church cannot use that money to pay for the electric bill or host a youth camp without getting prior permission.