How to Make a (Stress Free) Church Finance Report

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There’s nothing as thrilling as sitting down to work on your monthly church financial report. ugh, I can't even read that with a straight face. Fact is, if you're like me (and many other lead pastors), then the work of creating church finance reports just isn't in line with your natural giftings.

BUT: examining church balance sheets, checking the bookkeeping, calculating liabilities, and using church financial software is still an important part of church leadership.

See, God is interested in every church's financial health - and church finance reports are a big part of that.

I'm Joshua Gordon, and for over two decades, I've held various church leadership roles (paid and volunteer), including helping to plant New Life Fellowship in Cambridge, Ontario, Canada.

I'm going to pass on what I've learned.

So, I'm going to break down everything you need to know to have a stress free church financial report. Along the way, we’ll give you some examples and checklists to help you get started. By following these tips, you’ll be able to generate church financial reports that are clear, transparent, and informative!

After all, when your church finances follow the pastoral vision and direction, then trust and financial accountability between your church and its members will grow.

Your people will have a greater willingness (and excitement) to support the church’s mission with their time, energy, and money.

I wrote this article with Jim Gordon, the senior pastor of Elora Road Christian Fellowship. Jim has been leading ERCF for 20+ years; in that time, he's seen it all - and understands the ins and outs of managing a church's financial health.

Church finance reports bring clarity and shine a light on your current financial circumstances. Even if what you see is discouraging, you and your leadership team will be equipped to plan for a better financial future .

Senior Pastor (Ontario, Canada)

This article covers:

What Is a Church Financial Report?

A church financial report is simply a snapshot of your church’s current financial situation. It should paint a clear, accurate picture of the current financial status of your church. so it's not meant to be a church budget. It's not meant to be a forecast.

Finance reports like this are typically created monthly (but sometimes quarterly or annually, depending on the report's intended audience - more on that in a second.) When considering how often you need these created, consider the following:

All of these questions factor into this conversation.

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Who is Involved in the Development of a Church Financial Report?

Typically, a church finance committee or board of directors takes the lead on this (often aided by church accounting software tools), as they are responsible for providing oversight and direction. Often, the treasurer will work alongside a bookkeeper or accountant (hire or outsource if necessary) to present the church report. If you don’t yet have a board or church finance committee in place, this is a great time to recruit a team of qualified volunteers.

Pastors, your role is also key, as Jim Gordon unpacks in more detail here:

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Church finance reports inform effective planning.

A church finance report, by giving a snapshot in time of your church's health, greatly supports your budgeting and planning efforts. You and your leadership team will be equipped to identify and respond to trends, manage your resources effectively, and manage and mitigate financial risks. Ultimately, church finance reports are real time feedback on your church's operational and administrative decisions.

Church finance reports protect the church.

Church finance reports are a big part of church record management. They make it much harder for financial problems to grow and develop out of sight. Issues are nipped in the bud. A church financial report provides transparency by detailing the sources of income and how funds are spent, ensuring accountability - not only to the congregation, but also to your church's board of directors, finance committee, etc.

Church finance reports are* required by banks or the government.

Church financial report assists with compliance by ensuring adherence to legal and regulatory requirements governing financial transparency and reporting. Monthly reports (for example) show a track record of financial transactions and decisions, which can be helpful if your church is needing financing for a building, etc. Some regulatory bodies require regular reports as well (IRS or CRA) - though we recommend you follow-up with your accountant for specific advice on your situation.
*occasionally

The importance of reporting for church life and operations.

Who Is A Church Financial Statement For?

Church finance reports may change in their scope and complexity, depending on who the report is for:

What Are the Core Components of a Church Financial Report?

There are a handful of components that make up a church financial report. Each is a vital tool for both internal management and external stakeholders to understand the financial position of your church. Let’s break it down!

The Income Statement..

. summarizes the church's revenues and expenses over a specific period, typically detailing sources of income (e.g., donations, tithes, grants) and church expenses (e.g., salaries, utilities, equipment, maintenance).

The Balance Sheet.

..provides an overview of the church's assets, liabilities, and net assets (or equity) at a particular point in time. This helps assess the overall financial health.

The Cash Flow Statement.

. tracks the flow of cash into and out of the church during a specified period, providing insights into the financial health and operational efficiency.

The Budget Comparison.

. shows actual financial performance alongside the budgeted amounts, helping identify areas of over- or under-spending, and informing future budgeting decisions.

Contextual Notes.

. provide additional context or explanations that may be needed. If facilities spending is substantially higher because the church building needed a new furnace this month, ensure that additional context is noted in the report.

Free Checklist: Church Finance Report Checklist

Let’s go over exactly how to develop the report. If this is your first time developing a financial statement, keep this in mind: progress over perfection. This isn’t an audit, it’s just a way of organizing all the relevant information, and it’ll take time to get the hang of it.

Step 1. Gather Financial Data

Collect relevant data for the reporting period (income, expenses, assets, liabilities, etc.). You can find what you need in your accounting software (which offers a ton of benefits to your church), bank statements, cash flow statements, receipts, and invoices.