What features should I look for in a church accounting program?
True fund accounting
One way that church accounting differs from for-profit business accounting is that a church’s primary source of income is charitable contributions from members. Many churches accept contributions that are designated for specific church ministries or outreach programs, so church accounting software should have a way to keep track of the money that comes in and goes out for those specific purposes, or “funds.” A true fund accounting system makes this easy by allowing you to create funds, establish income and expense accounts to track activity for each fund, and view a profit and loss (or income statement) that groups your income and expenses together for each fund.
Integrated contribution tracking
Having one program for entering contributions and another for accounting means constantly having to enter all of your contribution income two different ways. By selecting an accounting program that includes contribution tracking, you can avoid that hassle and streamline your routine entry. A fully integrated church accounting solution can allow you to track individual member contributions, send out IRS-compliant year-end giving reports to your members, keep track of your expenses, and generate accounting reports for church business meetings all in one program.
Payroll (especially for ministers)
Church payroll can get a little more complicated than payroll in a for-profit business because of the unique dual tax status that ministers have. Essentially, ministers who are considered employees by their church are treated as employees for income tax purposes, but they are treated as self-employed individuals for Social Security and Medicare. Churches should not withhold for Social Security and Medicare on a minister’s paycheck, but a minister can opt to have federal income taxes withheld. A church may also provide a housing allowance as part of the minister’s compensation package. This allowance is subject to the same self-employment taxes for Social Security and Medicare that the minister’s regular wages are, but it is not subject to federal income tax. While a for-profit accounting software option may allow you to customize the way that your minister’s payroll is set up, opting for a dedicated church accounting program that includes payroll functionality can simplify this setup and ensure that your minister’s compensation aligns with IRS guidelines.
Which church accounting software option is right for my church?
If your church is small to mid-sized and you are looking for an affordable, all-in-one solution, you should consider FlockBase or ChurchTrac
FlockBase offers fund accounting, integrated contribution tracking, and payroll capabilities at an affordable price, making it an excellent choice for small to mid-sized churches. With this program, you can keep track of member information, track contributions for an unlimited number of members, record expenses, calculate paychecks with the appropriate deductions for both ministers and non-ministers, and generate financial statements. You can also export reports to CSV for further flexibility and analysis in Excel. All of these features are available on both the Cloud Plus plan for $39 per month and the Cloud Pro plan for $59 per month, but if your church does not need the payroll component, you could opt for the Cloud Basic for $24 per month.
FlockBase also supports integrated online giving and direct deposit for payroll and vendor payments, as well as texting and emailing to keep your congregation informed.
Click here to learn more about FlockBase: flockbase.com
ChurchTrac
ChurchTrac offers fund accounting, integrated contribution tracking, and robust management features for small to mid-sized churches, but it does not include a payroll component to calculate withholdings and generate 941s or W-2s. With ChurchTrac, you can keep track of member information, track contributions, record expenses, and generate financial statements.
ChurchTrac also features integrated online giving, emailing, child check-in, and a mobile app. Prices start at $29 per month for 75 congregant names and go up to $119 per month for unlimited names. Texting capabilities can be added for $7 per month.
Click here to learn more about ChurchTrac: churchtrac.com
If your church is a little bit bigger and prepared to pay more for some premium features, you should consider Icon Systems or Realm.
Icon Systems
Icon Systems offers fund accounting, integrated contribution tracking, and payroll capabilities, as well as some advanced features such as automated bank and credit card transaction import. They also support e-filing for W-2s and 1099s through a partner platform. To utilize all of these features, you would just need their basic church management program, the standard accounting add-on, and the payroll add-on, which would cost $125 per month or $1415 per year.
Icon Systems also offers a management program specifically designed for denominations, allowing for multi-level fund accounting and reporting at the church and denomination levels. Pricing for this product is not available on their website.
Click here to learn more about Icon Systems: iconsystemsinc.com
Realm
Realm by ACS Technologies also offers fund accounting, integrated contribution tracking, payroll capabilities, and some advanced features such as automated bank and credit card transaction import. Realm stands out because it also offers integrated e-filing for 1099s, W-2s, and 941s, really making your church bookkeeping job easier. Those premium features likely mean that Realm would cost your church more than many church accounting and management alternatives, though ACS does not publish their pricing online. Pricing for their product is customized based on your church’s size and feature needs.
Click here to learn more about Realm: acstechnologies.com/realm
If your church is large and you are looking for an enterprise-level accounting system with advanced features to streamline your church’s bookkeeping, you should consider Sage Intacct
Sage Intacct
Sage Intacct offers fund accounting, integrated donation tracking, automated bank and credit card transaction import, as well as AI-powered features to help your church simplify bookkeeping tasks. Sage is also scalable, making it suitable for mid-sized churches up to large, multi-campus ministries.
If you are looking for payroll functionality, you will have to add on Sage HCM as an additional, integrated product. With Sage HCM, you can calculate payroll checks and send them via direct deposit. The program also allows you to e-file 1099s, W-2s, and 941s.
Sage does not publish prices online. Pricing for their products is customized based on your church’s size and feature needs.
Click here to learn more about Sage Intacct for churches: sage.com/en-us/industry/nonprofit/church/
