Accountant for Churches: What To Look For

With church growth comes growing demands. Especially in the realm of managing the church's finances!

Now it's time to consider finding an accountant for your church. Ideally, one who will be in it for the long haul and will help advance the mission and vision of your church.

You could try Googling "church accountant near me" and sifting through dozens of results!

But there is a much better (and easier) way...

Start at the Beginning: Assess Your Church's Needs

First, you have to know your church. Here's how to break it down:

Bookkeeping for Small Churches

Most churches do not have complex accounting or payroll needs.

If your church is small (fewer than 200 people worshiping each week*), then your income and expenses are probably easy enough to manage by one person using a church accounting software designed for small churches. No need to hire a dedicated accountant.

A single-entry accounting system will do everything you need to manage your funds. Bonus points if the program is user-friendly enough to make it easy for non-accountants to understand. Double-entry accounting services like QuickBooks are overkill for over 90% of churches.

Bookkeeping for Large Churches

However, if your church is larger (200+ people in attendance*), manages a business (like a preschool), or has Accounts Payable and Accounts Receivable, your organization's financial needs are complex enough for a dedicated bookkeeper.

*Note: How many people are in the pews is just one factor to consider. You will need to assess your church's needs beyond mere attendance figures.

Your Church's Financial Needs

Every church has unique financial needs shaped by factors such as congregation size, budget, and ministry activities.

Begin by assessing your church's specific requirements. Are you a small congregation with limited resources, or a larger church with more complex financial operations? Understanding these needs will guide you in determining if you need an accountant and what their responsibilities will be.

Define Your Budget (And Other Resources)

Investing in professional financial management is crucial for long-term sustainability.

However, there are a few different arrangements you can choose from. Which you choose will be determined by your budget.

When Your Church Needs a Part-Time Accountant

If your church is growing but still not a large church, you should consider hiring a treasurer part-time. If you already have a volunteer managing the church's finances, consider offering them a part-time salary to compensate them for their increasing responsibilities.

You also might consider outsourcing to an accounting agency. While it may be a bit more expensive than paying your current volunteer, it will give you access to greater expertise and it's still cheaper than hiring full-time.

When Your Church Needs a Full-Time Accountant

If your church is ready for a full-time accountant, you still have options. You can have an in-house accountant that attends and works for your church or you can find an agency with CPAs that specialize in non-profit accounting.

Determine a realistic budget for hiring an accountant, considering whether a full-time, part-time, or outsourced arrangement best suits your church's financial capabilities.

Qualities to Look for in a Church Accountant

When choosing an accountant for your church, look for these qualities that are particularly relevant to church finance:

• Understanding of nonprofit accounting standards: Look for experience in fund accounting, donor management, and compliance with IRS regulations for tax-exempt organizations.
• Experience working with churches or nonprofits: An accountant familiar with the unique challenges and opportunities of church finances will be better equipped to provide tailored guidance.
• Familiarity with tax laws and regulations: Ensure the accountant is up-to-date with tax laws affecting churches, including exemptions, deductions, and reporting requirements.
• Strong attention to detail and organizational skills: Precise record-keeping and reporting is essential for maintaining transparency and accountability.
• Effective communication skills: The accountant should be able to translate financial information into clear, understandable terms for church leadership and members.
• Shares your mission and vision: This is probably the most important. Your treasurer needs to have the same beliefs and values and must be on board with your church's mission.

Finding a candidate like this might seem like looking for a needle in a haystack. But it's not as hard as it seems. You just have to know where to start.

Where to Start Your Search

Finding the right candidate is easier than you think. The right person might already be standing in front of you on Sunday mornings.

Start with Your Congregation

If your church is big enough to justify hiring an accountant, there is a high likelihood that you have at least one CPA in the pews.

Meet with them and discuss your church's needs. It's likely that either they can take on your church's accounting needs or they can refer someone they trust.

Also, if your church doesn't have an accountant you can trust, talk to some business owners in your church and ask them who they use to manage the books for their business.

As long as this person meets the qualities listed above, the search is over!

If You Have to Look Elsewhere...

If your church doesn't have a CPA, here are a few good places to start your search...

• Ask other churches or non-profit organizations in your area for recommendations
• Consult local accounting firms specializing in non-profit orgs
• Explore online platforms like church bookkeeping services or job boards tailored to non-profit accounting

Interviewing Candidates

Getting a referral is crucial. But even if someone comes highly recommended (and even if this person is a member of your congregation), you still need to determine if this person is the right fit.

In your interview, ask them direct questions related to your church's needs for this role. Only you know exactly what your church needs. But we recommend these questions to start:

Share Your Expectations with Them

It would be great if this new candidate could read your mind and understand your expectations. But they can't! So it's up to you to communicate them.

If you thoroughly assessed your church's needs as we discussed at the beginning of this article, you should be able to convey these needs to the new treasurer.

Every church is different. Only you know exactly what your church needs. But most churches will need the following:

Constant Communication

The treasurer should share reports or updated financial data with leaders on at least a monthly basis. Let them know what reports or financial statements you prefer.

The treasurer should also be prepared to produce reports, share them with members, and answer their questions.

Precise Records

This is the whole point of the bookkeeper's role! The church needs to know how much money it has, what the money has been designated for, and to have an up-to-date budget.

Maintain Several Years of Financial Records

Receipts and bank reconciliations should be kept for at least 3 years. Other documents, like Form 990 and loan payment info, need to be maintained for 7 years. This will help tremendously in case of an audit.

This means keeping physical copies in a filing cabinet and electronic copies as a backup.

Church or Denominational Policies

Check your church bylaws and your denominational bylaws. There may be some requirements specified in those documents that the accountant must meet.

An Accountant for Your Church Over the Long Haul

Building a trusting relationship with your accountant is essential for long-term financial stewardship. By working together, you can guarantee your church's finances are managed with integrity and transparency.

By assessing your church's needs, defining your budget, and seeking out qualified candidates, you'll make it easier to find the right person for the role. Remember, investing in the right accountant is an investment in the future of your church.