Do you have restricted contributions coming into your church? Does your board or council designate funds for specific ministries? Are you unsure what you have to do with restricted or designated funds?
Restricted contributions bring with them the requirement of additional accounting needs. Fund accounting ensures that both restricted contributions and funds designated by leadership are used for the correct corresponding expenses, allowing the church to steward all monies collected for specific uses intended by the giver.
Funds can be considered special projects outside the normal operations of the church. Churches track these projects using fund accounting practices to keep everything separate. The income coming in, both the restricted giving and leadership designated funds, and the expenses used for the project are separate from the operating activity of the church.
There are many types of funds churches use to set aside specific money. Examples of the most popular funds in church accounting are often: Building Fund, Missions Fund, and Benevolence Fund. Although these funds can be found in many churches, your church may have these same funds, more funds, or fewer funds depending on your specific needs.
Wisdom Over Wealth recommends using either Quick Books Online, our preferred software solution, or Aplos for fund accounting. Both systems use different means to accomplish the goal of true fund accounting, keeping funds separate from the church operating budget.
If your leadership team is looking to Get Started with fund accounting or are interested in implementing this, give us a call or send us an email! We’d love to partner with you! with fund accounting or are interested in implementing this, give us a call or send us an email! We’d love to partner with you!
