Financial Foundations: Charting your church's success, or failure, with the chart of accounts
Many church leaders complain because the financial reports they receive are confusing or they just don’t understand them. They blame the accounting software or the treasurer, or they just assume that finances are something they’ll never understand. Chances are the real problem is the chart of accounts in the church’s accounting system. The chart of accounts is often the difference between your financial reports being meaningful and insightful or confusing and cumbersome.
The chart of accounts is basically all the lines in your financial reports, the assets, liabilities, expenses, income, and equity. How the accounts are setup determines what your reports can look like. If your chart of accounts have been haphazardly added to over the last 10-20 years, your financial reports will feel haphazard and jumbled. It becomes difficult to produce a good financial report without an updated chart of accounts, no matter who the treasurer is, or what accounting system you’re using. A regularly updated, well-designed chart of accounts gives you the opportunity have well-designed financial reports.
Sheri Meister, executive director of the Dakotas United Methodist Foundation, and Jeff Pospisil, treasurer of the Dakotas Conference, identify three steps in this webinar to cleaning up your church’s chart of accounts: (1) cleaning up the old stuff by either chucking it or renaming it; (2) making sure every account has an owner; and (3) using the roll-up or sub-account abilities of your accounting system. If you follow these three steps, your chart of accounts will be improved which will improve your financial reporting which will improve your leadership’s decision-making ability.
The new year is approaching, now is the time to take a fresh look. Whether your chart of accounts needs some minor tweaks or a complete overhaul, this webinar will inform your practice.
