Financial planning is vital to your organization’s future. Without research and strategy, there is no plan. Without a plan, there is no roadmap to success.

In recent years, we’ve found that church roadmaps are getting tougher to build and forecasts are becoming harder to predict. All businesses have been impacted by the pandemic, for example, but most of those businesses are not directly reliant on outside or loyal donations to continue thriving.

Read on to discover the 4 steps to building your church’s financial plan, which include eliminating virtual bookkeeping myths and empowering you to prioritize your mission. 

Financial planning is vital to your organization’s future. Without research and strategy, there is no plan. Without a plan, there is no roadmap to success.

The idea of financial planning is to maximize your money by working in smaller steps to achieve a larger, long-term goal.

In this article, we will break down key steps to creating a roadmap for your church’s financial planning this fall.

4 steps to building your church’s financial plan include:

1. Determining your organization’s goals and objectives
2. Understanding church accounting and data
3. Building a budget
4. Eliminating virtual bookkeeping myths

To craft a solid plan, you must first determine the goals you wish to reach. Then, you’ll need to decide how to achieve those goals, with what resources and funding, and in what amount of time. 

As with all businesses and organizations, short term actionable steps are required to reach the finish line, your long-term goal. 

When it comes to creating your church’s goals for 2023, be sure to:

• have a way to measure the success of your objectives, 
• embrace innovation in terms of how you accept donations, etc., and
• engage the entire congregation.

It’s important to review previous months of the year to analyze your church’s accounting. This includes both spending and saving. This effort will offer a bird’s eye view of progress as well as assist with projections.

Expenses may change, donations may slow, and people may come and go. Due to the limited ability to lock in expected income, due to unpredictable cash flow from donations, changing of seasons, Covid, or others, a church’s income can be tough to predict. 

Unpredictability has risen in churches. All businesses have been impacted by the pandemic, for example. However, most of those businesses are not directly reliant on outside or loyal donations to continue thriving.

The point of gathering and analyzing data is to determine what is working and what is not, and then to further fund what is proving to be successful. What does bring you consistent cash flow outside general donations? What were your biggest expenses in 2022? How can you plan more wisely for next year’s expenses? What budget is necessary to achieve maximum financial growth in 2023?

The bottom line is to continue to expand what contributes to your annual income and eliminate what does not.

Building a budget requires careful consideration and planning, and more time than you may have at the moment. 

Here is our checklist to help you start small and eliminate hours of your budget building process:

1. Evaluate your income and spending. Underestimate your income but overestimate your spending. Estimates are exactly that, an estimate, or an educated guess. Protect your cash flow and prepare for the unexpected.

2. Take a deep dive into last year’s income by basing your budget on a percentage of 2021’s income. For example, if you can put forward most of 2021’s income as a budget, then a wise strategy would be to budget around 75% of that income for the following year, leaving room (and money) for 3 or more months’ worth of operating expenses.

3. Consider a shorter budget cycle. If you need to save time or resources, or if you are seeing a reduced number of church attendees, consider a 6-month budget cycle, rather than a full year. A half year budget is easier to manage, measure, and predict, as the goals you set are not for the following year, but the current one. 

4. Ensure that you account for all. Make sure your budget accounts for cash flow, not just total giving. Donations are the backbone of your organization, but various income sources must be identified and tracked.

5. Assess your need for church accounting software and/or virtual bookkeeping. We are here to help you manage all things finance, empowering you to prioritize your church’s mission. 

What if we told you that you could forget about every step and piece of advice above, and still successfully manage your church accounting, but in a less-than-hands-on way? 

It’s true. You can outsource and eliminate the above from your to-do list entirely just by working with us.

At Temple Management, we track and report performance and outcome metrics to help you get the most for your mission. We work to budget by fund, improve donation tracking, manage giving statements, and generate financial reports. Our team becomes your team for all financial reporting, accounts payable, accounts receivable, payroll accounting, and budgeting and forecasting.

With over 25 years of combined experience, our team knows that the behind-the-scenes view of nonprofit work can seem like carefully managed chaos. That’s why we want to help you manage the pain points of nonprofit and church fiscal management so that your organization can prioritize its mission.

We understand that these benefits alone may not convince you, so we decided to also debunk a few myths while we’re at it…

No more outsourcing parts of a project or opening the doors of your financial security to strangers. Talk to the same people every time you need us – the very people who know your account better than anyone else. Our group of certified public accountants become your trusted partners. We put you first every time.

You are with us every step of the way. There is nothing we do without your knowledge and approval. 

Besides managing your accounting documentation, we provide you with accurate, actionable financial insight regularly. Our analysis of your finances gives you, as well as our team, answers regarding your funding and expenses. Together we help make the best choices for your organization.

We are located right here in Georgia and can be reached by email, phone, or our website. Our team is your team – no language barriers, hard to reach personnel, or going days without answers.

We are debunking this myth for good! Our team of certified public accountants are experts in the use of our fully equipped system covering everything from compliance to general account analysis. Cloud technology allows us to work fluidly, handling your accounting faster and more safely than ever. Security is no longer a concern for virtual bookkeeping with us.

If you’re already considering or using church accounting software, you’re already on your way to virtual bookkeeping, and we understand there may be some hesitation. After all, you are expected to trust your bookkeeper and rely on them to make good decisions with your entire ROI on the line.

We got into the financial planning industry not because that’s “where the money is,” but because we know how impactful money can be to nonprofits just like yours. Reach out at 770-892-2087 to let us help you forecast for fall and prepare you for a plentiful, successful 2023 ahead.