Operations 103 Finances: Class 2. Level 1: Certificate in Operations . Operations 101—Staffing Operations 102—Communications Operations 103—Finances Operations 104—Finances Operations 105—Facilities . Operations 103—Finances . Class 3—Expenses. Scripture .
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1 Chron. 29:11 Yours, Lord, is the greatness and the power and the glory and the majesty and the splendor, for everything in heaven and earth is yours. Yours, Lord, is the kingdom; you are exalted as head over all.
Prov. 3:6 in all your ways submit to him, and he will make your paths straight.
1 Chron. 10:31So whether you eat or drink or whatever you do, do it all for the glory of God.
Three Keys for Success
ex.pense /ik’spens/ noun
1. the cost required for something: the money spent on something
synonyms:cost, price, charge, outlay, fee. tariff, levy, payment; More
2. the costs incurred in the performance of one’s job or a specific task, esp. one undertaken for another person.
plural noun:expenses “his hotel and travel expenses”
3. A thing on which one is required to spend money.
plural noun: expenses “tolls are a daily expense”
synonyms: overhead, costs, outlay, expenditures(s), charges, bills, payment(s):
3rd person present: expenses
1. offset (an item of expenditure) as an expense against taxable income.
Fund Accounting reports and track information that is most important to you, your board and your supporters.
Fund accounting records what types of direction the donor gave when giving and how then the funds were spent.
Each fund has a distinct purpose, ranging from operating expenses to funding the various activities of the organization.
The IRS has no specific listing of expenses that the church are prohibited from spending money on beyond the three categories below.
1.Inurement and Private Benefit (Unreasonable Compensation or Personal Expenses)
2.Substantial Lobbying Activity & Political Campaign Activity (Politics)
3.Illegal Items (Illegal Substances)
Tip: The IRS offers a quick reference guide of procedures for Churches and Religious Organizations to help them comply with tax laws. http://www.irs.gov/pub/irs-pdf/p1828.pdf
Established a policy that all expenses are an arrangement to either reimburse or advance an employee's business expenses.
Follow the rules of an accountability plan where every reimbursable expense must meet three requirements: (1) it involves a church connection (it serves a purpose for the church); (2) it requires the employee to sufficiently explain why the expenses were necessary; and (3) it requires the employee to return any excess amounts that don’t comply with the policy.
Employees must provide the organization with sufficient information to identify the specific business nature of each expense and to prove the necessity of each expense. It is not sufficient for an employee to lump expenses into broad categories such as "travel," or to report expenses through the use of non-descriptive terms such as "miscellaneous business expenses."
Institute the "Three P" policy on every receipt, which includes 1. Purpose, 2. People, and 3. Place. A description and date should be on each receipt that is turned in, which is then entered on the proper expense reports.
Internal controls are what CPA’s do to ensure:
Chart of accounts is a way to identify expenses.
Just like passwords for the internet, you don’t want to many of them or you will forget.
Just like theology, you don’t want different interpretations of the same core scripture (expense).
Salaries and Wages
Benevolence & Missions
Direct Program Expenses
Meals and Entertainment
51100 . Salaries & Wages
51101 . Salaries
51102 . Bonus
51103 . Housing Allowance
51303 . Employee Honorarium
51104 . Payroll Taxes
51200 . Employee Benefits
52702 . Workers' Comp Insurance
51201 . Medical Insurance
51202 . Dental Insurance
51203 . Life Insurance
51221 . LTD
51222 . STD
51223 . EE Life
51224 . AD&D
51204 . Vision Insurance
51205 . Voluntary Insurance
51211 . 403(b) Match
51213 . Taxable Employee Benefits
51220 . Other Benefits
51300 . Honorariums/Gifts
51301 . Honorarium/Gift
51302 . Gifts
52100 . Rent
52101 . Rent Building Space
52102 . Equipment Rent
52103 . Event/Other Rentals
52105 . Ground Lease
52200 . Utilities
52201 . Trash
52202 . Cable/Satellite TV
52203 . Electric/Gas
52204 . Water
52300 . Building Expense
52301 . Equipment Maintenance
52302 . Building Maintenance
52303 . Cleaning Services
52304 . Cleaning/Restroom Supplies
52305 . HVAC Maintenance
52306 . Security Monitoring
52307 . Pest Control
52308 . Snow Removal
52309 . Landscaping
52310 . Common Area Maintenance
52701 . Building Insurance
52801 . County and CA Taxes
52400 . Professional Fees
52401 . Auditing/ Accounting Fees
52402 . Legal Fees
52403 . Consultant Fees
52404 . Background Checks
52405 . Permit/Association Fees
52407 . Payroll Processing Fee
52500 . Interest Expense
52503 . Interest - Howard Bank Loan
52504 . Interest - Church Loans Loan
52505 . Interest - Bentley-Forbes Loan
52506 . Interest - BB&T Loan 0001
52507 . Interest - BB&T Loan 0003
52508 . Principal - BB&T Loan 0001
52509 . Principal - BB&T Loan 0003
52600 . Banking Expense
52602 . Online Merchant Fees
52603 . Bank Fees
52604 . Credit Card Fees
53000 . Direct Program Expense
53100 . Direct Program Expenses
54104 . Books/DVDs/Teaching Resources
53101 . Ministry-Specific Equipment
53102 . Ministry-Specific Supplies
53103 . Resource Ctr Inventory
53104 . Food Supplies
54000 . Technology/Equip/Office
54100 . Office Expense
54101 . Office Equipment
54102 . Office Furniture/Decor
54103 . Office Supplies
54105 . Postage
54106 . Printing
54200 . Technology
52406 . IT
54306 . Hosted Software
54307 . A/V Equipment
54201 . Cellular Phone
54202 . Local/Long Distance Phone
54203 . Phone System
54301 . Computer Equipment
54302 . Software
55100 . Meals/Entertainment
55101 . Meals
55102 . Entertainment
55200 . Travel
55201 . Lodging
55202 . Transportation
55203 . Mileage Reimbursement
55300 . Education
51212 . Education/Tuition Reimbursement
55301 . Conference
56000 . Advertising
56101 . Programs/Flyers
56102 . Business Cards
56103 . Newspaper/Radio Advertising
56104 . Public Relations
56105 . Directories
56106 . Signs / Banners
57000 . Benevolence/Missions
57100 . Benevolence/Outreach
57101 . Financial Assist./Benevolence
57102 . Domestic Outreach
57103 . International Outreach/Missions
57104 . Outreach Supplies
59000 . Non-Cash Transactions
59101 . (Gain) Loss on Disposal of Fixed Asset
59201 . Depreciation
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Send Questions via Chat
Generally speaking, the authors mention that setting a strategic budget and analyzing it should fall within the parameters they suggest.
What would you say some of the reasons are that your church does or does not analyze their budgets strategically?
The authors mention how power can influence the analysis and allocation of budget and resources.What is the relationship, if any, between a church’s governance style/ polity and the giving strategy of its members?
What we see in the book is that a lot of the power to influence the budget is tied in up in the people who help lead the church (formally and informally). What are some of the ways a monitored, strategic budget can utilize both the “power players” in church as well as making sure that the church moves forward as a unit, committed to the Great Commission?