Accounting Budgets

ChurchTrac features a complete church budget software that's built into the Accounting screen. The Budget Screen allows you to create annual church budgets and evaluate the amounts spent or received against your budget.

Before You Create Budgets
Creating A New Budget
Church Budget Setup
Evaluating Your Budget vs Actual
Budget Reports
Pro Tips

Here are suggestions (The Eleven Commandments) on how to understand the framework and foundation of how Budgets work in ChurchTrac:

Budgets use CATEGORIES only and not Funds.
Budgets track what you anticipate to receive in the upcoming year in undesignated income, and what you project to spend from only that income.
INCOME: Income should only be limited to General Income Categories, which are linked to the General Fund. Do not include designated income categories in the budget.
EXPENSE: Only expense categories that are linked to your General Fund should be included. Any others that are linked to another Fund should be excluded.
Budgets are a roadmap that your congregation has collectively agreed to, regarding how undesignated money received should be spent for the upcoming year.
Budgets are intended to plan for the year, not on a monthly basis.
Reports will track your budget year-to-date, always from the beginning of the physical/fiscal year, and not for specific months.
Budgets do not take into consideration any existing money or leftover income from the prior year.
Budgets capture transactions from all the bank accounts listed; for example, you cannot limit a budget to one checking account only when you also have a savings account or money market.
Budgets will round your numbers to the nearest whole amount. It is not intended to show fractional currencies.
You can create a separate Budget for Designated Income and Expenses, but this will not track the same monies as your Primary Budget for Undesignated transactions.

Before You Create Budgets

Before you create a budget for your church, you will need to first set up your Categories by selecting the Categories tab at the top of the Accounting Screen. This is part of your initial Accounting Setup that needs to be completed prior.

Any monies attributed to a subcategory (not included in the budget) will still be included in the parent category totals. If you have subcategories under a budgeted parent category that are not intended to be in the budget, you will want to pull them out from under the parent category.

Non-Budgeted Categories

Step 1: Understand the Relationship Between Parent and Subcategories

Parent categories include the total of all monies allocated to their subcategories.
If a subcategory is not intended to be in the budget, its total will still show up in the parent category totals.

Step 2: Identify Subcategories That Should Not Be Budgeted

Review all subcategories under each parent category and determine which subcategories are not meant to be included in the budget calculations.

Step 3: Remove Non-Budgeted Subcategories

Locate the parent category that contains the subcategories you identified in Step 2. Then, pull the subcategories that are not intended to be in the budget out from under the parent category. To do this, select the preferred parent, or the blank option to remove it. Move these subcategories to a different parent category or create a new category for these subcategories if they need to stand alone.

Watch our Create Non-Budgeted Categories video to learn more about this process and why it's important.

Budget Category Example

Example: Non-Budgeted Payroll Items vs. Budgeted Payroll Taxes

In payroll, there are items that are part of the payroll process but should not be included in the budget totals, and others that are specifically budgeted.

Non-Budgeted Payroll Items

These are items that are the employee's responsibility and not included in the church's budget, but are still part of the payroll calculations. For example:

Federal Withholdings – Amount withheld from an employee's paycheck for federal taxes.
Local (County) Withholdings – Amount withheld for local county or city taxes.
Medicare – Employee's contribution to Medicare insurance.
Social Security – Employee's contribution to Social Security insurance.
State Withholdings – Amount withheld for state taxes.

These items are not included in the church's budget totals because they are the employee's responsibility and do not directly affect the church’s finances.

Non Budgeted Category

If these non-budgeted items (e.g., employee federal withholdings) are listed under the same parent category as budgeted payroll taxes (e.g., employer Social Security contributions), they will show up in the parent category totals, which will cause inaccuracies in the budget. To avoid this, it's important to remove non-budgeted items like federal withholdings from the payroll taxes category.

Budgeted Payroll Taxes

In contrast, there are payroll taxes that are included in the church’s budget. These are the employer’s contributions and include the following:

Medicare (Employer Share) – The church matches the employee's contribution to Medicare.
Social Security (Employer Share) – The church matches the employee's contribution to Social Security.

These taxes are budgeted because the church is responsible for paying the employer’s share, and they are an expense for the organization.

Budgeted Category

If you have any questions about how to organize these categories, contact our support team before making changes.

Creating A New Budget

Once your categories are set up, return to the Budget Screen and select "Actions," then select the "Create Budget" option.

Creating a Church Budget using ChurchTrac's Church Finance Software

In the following screen, give your budget a name and start date. Then select the categories and subcategories you want to include in this budget.

Creating a Church Budget using ChurchTrac's bookkeeping software for churches

Once you have verified that all the appropriate categories are highlighted, select the "Create Budget" button. The following screen will look like this:

Creating a Church Budget with ChurchTrac Church Accounting Software

Church Budget Setup

You will notice the new budget initially has $0 budgeted for each category. There are two ways you can set up each item of your new budget.

Detailed Setup

To do a detailed setup for each budget item, select that line of the budget and enter the budget amount and item period in the following window.

You can choose a yearly or monthly item period, or create a custom period for each line item.

Setting up budget reports in ChurchTrac's accounting software for small churches

"Year" is the default item period and applies the budget amount to the entire year. "Month" applies that amount to each month, and "Period" applies the budget amount to the date range you select.

Quick Setup

To do a quick setup that allows you to quickly enter the amount of each budget item without having to edit each line, select the "Actions" button, then select "Edit this Budget."

Using the Quick Budget setup for small church accounting in ChurchTrac

In this window, you can enter the budget amount, add or remove line items, and change the budget name or start date.

Evaluating Budget vs. Actual

You can evaluate the budget vs. actual amounts by selecting a date from the drop-down list. The time period will begin at the established start date of the budget and end at the date indicated by your selection.

Using ChurchTrac Church bookkeeping software to manage your church finances

The Income and Expense Category items will reflect the year-to-date budget for the time period selected. Each time you adjust the time period, these amounts will change to reflect the new time period. These reports are cumulative.

Budget Reports

ChurchTrac offers a variety of budget reports. To find them, select the "Actions" button, then choose "Budget Reports."

Use the tool tips (?) to learn more about the columns and data provided in these reports.

Creating Church Budget Reports in ChurchTrac

Select the report you need, then select "View Report" for a PDF version, or "Export to CSV" for an editable spreadsheet.

Exporting your church budgets with ChurchTrac

Budget Report Options

Auto: Shows what is being displayed on the Budget screen
Show All: Shows totals for the parent and subcategories
Hide All: Shows total of parent category

Pro Tips

Editing Categories

The order the Categories appear on the Budget, as well as the income or expense designation can be edited in the Categories tab on the Accounting screen toolbar.

Cloning a Budget

You can clone any budget in ChurchTrac in seconds. Select the budget you wish to clone. Then select the “actions” button and choose clone budget. This means that creating budgets in the future will be even faster. Yay!

Prepare for Next Year

Use the Budget Reports to help you budget for next year. The Budget vs Actual Report will go a long way in understanding how your budget compared to actual fundraising and spending last year. Watch our quick Pro Tip video to see how it works.

Budget Period

For budget items that only happen for a specific time period in your yearly budget, navigate to the budget item, select "Period" and set the date range.

Budget Reports

The data in the reports will reflect the time period set on the "Display Budget Through" drop-down selection box at the top of the screen.

Non Budgeted Items & Examples

Since a Parent Category includes amounts from ALL of its subcategories, there are situations in which you will want to move non-budgeted subcategories to their own Parent Category that will not be included in your budget.

Examples of this include employee-shared withholdings such as:

Social Security & Medicare Taxes
Federal withholdings
State & local tax withholdings
Employee retirement contributions

Creating a Church Budget