Financial Resources

Ideas to keep your congregation financial healthy

This page contains best practices for financial planning and management for your congregation, as well as critical resources such as the latest salary guidelines. If you have read through these guidelines and still have questions, please e-mail Steve Homberg at the synod or contact him by phone at 773-248-0021. 

Salary Guidelines
Salary Guidelines for Rostered Leaders in the Metropolitan Chicago Synod are provided by the synod to assist in establishing appropriate salary packages. It is our hope that the various charts and attachments will provide useful information.  Salary Guidelines

Congregation Financial Best Practices

What is a Best Practice?

An idea that asserts that there is a technique, method, process, activity, incentive or reward that is more effective at delivering a particular outcome than any other technique, method, process, etc. The idea is that with proper processes, checks, and testing, a desired outcome can be delivered with fewer problems and unforeseen complications. Best practices can also be defined as the most efficient (least amount of effort) and effective (best results) way of accomplishing a task, based on repeatable procedures that have proven themselves over time for large numbers of people. -wikipedia.org

1. Counting 

  • Offering counted same day received (after worship)
  • Two non-related (blood, marriage) counters (financial secretary, treasurer, and bookkeeper should not be counters)
  • Outline of counting procedure (“how-to”) available. Standard pre-printed (2 or 3-part) counters report completed and signed
  • Bank Duplicate deposit slip completed
  • Money and bank deposit slip copy locked in night deposit bag
  • Copy of counters report put in financial secretary’s mailbox along with offering envelopes
  • Copy of counters report put in treasurer’s mailbox
  • Money taken and deposited in bank night depository

2. Recording Receipts

  • Financial Secretary records giving envelopes and reconciles total to counters report
  • Bookkeeper records deposit allocation in accounting system and reconciles to counters report
  • Any discrepancy in totals reported immediately to treasurer. Treasurer investigates and corrects discrepancy
  • Treasurer reports corrected amounts to financial secretary and bookkeeper to record

3. Authorizing Disbursements  

  • Form W-9 and workers compensation insurance certificate obtained from all independent contractors
  • Purchase order forms are used for all non-reoccurring (variable) expenses  
  • Purchase order forms are pre-numbered and are 3-part forms  
  • Purchase order forms are logged (date, number, who, ministry, what and amount) when take
  • Purchase order form logged and prepared by requesting individual(s)  
  • Purchase order form signed by committee chair, team facilitator, or pastor after confirming requested amount is within budget
  • Purchase order copies placed in purchase order file, requesters mailbox, and treasurer’s mailbox for payment
  • Treasurer initials for processing and places in bookkeepers mailbox

4. Writing Checks

  • Bookkeeper enters reoccurring (fixed) expenses (utilities, mortgage, maintenance, etc.) expenses into accounting system with detail  
  • Bookkeeper enters treasurer initialed purchase orders into accounting system with detail
  • Bookkeeper generates checks for treasurer review and for signatures  
  • Bookkeeper attaches payer check stub or check copy to invoice for reoccurring disbursements or to invoice and purchase order for non-reoccurring disbursements 
  • Bookkeeper places checks and invoices / purchase orders in treasurer’s mailbox  
  • Treasurer reviews invoices, purchase orders, and checks for accuracy  
  • Checks are signed by treasurer and one other authorized check signer (all checks should require double signatures)  
  • Treasurer either mails and distributes signed checks or returns checks to bookkeeper for mailing and distribution
  • Invoices filed in paid bills filing system

5. Processing Payroll  

  • Form I-9 is completed and signed for ALL employees, including the pastor; and are filed in the Form I-9 file  
  • Form W-4 is completed and signed for all employees (including pastor if mutual withholding agreement is in place); and are filed in employee file
  • Weekly timesheets from non-salary employees are initialed by the pastor and placed in treasurers mailbox
  • Treasurer initials for processing and places in bookkeepers mailbox. Bookkeeper processes payroll (usually weekly for non-clergy staff and semi-monthly for clergy staff); however could process everyone using the same payroll period  
  • Bookkeeper runs or prepares payroll summary reports. Bookkeeper places payroll checks and summary reports in treasurers mailbox
  • Treasurer reviews payroll reports and checks  
  • Checks are signed by treasurer and one other authorized check signer (all checks should require double signatures)  
  • Treasurer attaches payer check stub or check copy to payroll reports and files reports in payroll processing file  
  • Treasurer either mails and distributes signed checks or returns checks to bookkeeper for mailing and distribution
  • Per IRS instructions, usually monthly, the treasurer prepares Forms 8109 and IL-501 and remits payroll taxes putting a copy of form & check in payroll tax file
  • Quarterly (Apr, Jul, Oct, Jan) the treasurer prepares Forms 941, puts copy in payroll tax file and files original with the government
  • Annually, (Jan) Forms W-2 / W-3 are prepared, employer copy placed in payroll tax file, employee copies distributed, and originals filed with the government; also at this time, Forms 1099 / 1096 should be prepared for any independent contractors paid over $600 in the calendar year - filed and distributed in same manner as W-2 / W-3 above

6. Reconciling - monthly 

  • Unopened bank statement envelope placed in treasurer’s mailbox. Bookkeeper generates detail and summary deposit and cash disbursement summaries and places in treasurer’s mailbox  
  • Treasurer opens bank statement and prepares bank reconciliation (if treasurer is the “bookkeeper” then another officer of the congregation should open statement envelope and prepare reconciliation)  
  • Any deposit discrepancies, bank fees, or interest income from statement reconciliation are give to the bookkeeper to record in the accounting system 7. Reporting - monthly
  • Bookkeeper generates monthly financial reports (statement of receipts and disbursements [income statement], cash flow statement, statement of assets & liabilities [balance sheet[, etc.) and places in treasurer’s mailbox
  • Reports should compare actual to budget for month and year-to-date
  • Treasurer reviews reports comparing numbers to summaries received above and to bank reconciliation
  • Treasurer drafts report for council and places report and financials in council secretary’s mailbox for distribution at monthly council meeting. Council should accept reports and move to file for audit
  • Copy can then be shared with congregation members

8. Annual Reporting  

  • Annual year-to-date financial reports should be generated by the bookkeeper and reviewed by the treasurer
  • Reports should compare actual to budget for the year
  • Report should be presented to the council to accept and include in the annual congregation meeting packet
  • An annual “audit” should be performed by the audit committee and an audit report generated by them to the council; the council receives the report, discusses and acts on any recommendations made by the audit committee and includes report in annual congregation meeting packet

9. Budgeting  

  • Finance or budget committee reviews year-to-date numbers and, if not year-end numbers, annualizes numbers to project year-end numbers
  • Expense side of budget is built starting with the ministries / missions for the new year envisioned by the leadership / council, followed by salaries, and finally by occupancy costs Revenue side of budget is built beginning with pledges received, adding non-pledge giving, adding loose offering amount, adding grants received, and finally adding non-giving revenue (building use, etc.)
  • Expense and revenue budget amounts compared and, if deficit, adjusted to “balance the budget”; may need to be sent to council for decision on how to balance
  • Budget then prepared as a narrative in addition to the number version
  • Council votes to recommend budget to congregation and includes in annual congregation meeting packet

 

 

 
Page URL: http://www.mcselca.org/congregation/admin/financial/