Church Accounting Made Easy
Church accounting is different from business accounting and has its own unique set of challenges. Fortunately, FlockBase church accounting software is specifically designed to address those church-specific issues.
- Fund accounting: Whenever a church accepts a contribution restricted for a specific purpose (building fund, benevolence fund, mission trip fund), the church is legally and ethically obligated to ensure the funds are used for the specified purpose. Tracking the balance of those restricted funds can be challenging. For example, because QuickBooks is designed for businesses rather than churches, there is not any easy way to track restricted funds in QuickBooks. Although there are a couple of workarounds that you can try to use to track restricted funds in QuickBooks, those workarounds are cumbersome and prone to errors. By contrast, FlockBase accounting software is specifically designed to account for designated funds.
- Contribution tracking: Churches are required to track members’ contributions and provide them with IRS compliant contribution receipts. Although there a lot of church management software applications on the market, most of them are not integrated with an accounting package designed for churches. As a result, many churches do not have any assurance that the contributions recorded in their management system actually balance to their financial accounting records and therefore do not have any proof that their contribution records are accurate. By contrast, with FlockBase, church management, membership and contributions are are fully integrated with the financial accounting records, you will always know that your contribution records match what was actually deposited into your bank account.
- Ministerial tax: Ministers are subject to very specific payroll tax laws. The Ministerial Housing Allowance is not reported as income on the minister’s W-2. Ministerial wages are reported in Box 1 of the minister’s W-2, but are not subject to mandatory federal income tax, Social Security or Medicare taxes. Dealing with these unique ministerial payroll tax issues can be quite challenging with a for-profit payroll system. However, because FlockBase was specifically designed to meet the needs of churches, it handles ministerial payroll tax issues with ease.
Although church accounting has its own set of challenges, FlockBase software can make church accounting easy.
