Not all monthly reports are created equal. Many churches receive a “Budget Report” or a “Profit and Loss” statement or some type of spreadsheet and this is all their leadership team ever sees. And while some information is better than none, is it really enough to make effective and informed decisions? Are there questions that are left unanswered, or perhaps even not enough information to know what questions to ask?
A strong monthly financial package delivers clear, timely, and relevant information that the leadership needs to properly evaluate and understand the church’s financial position at a glance and then make informed decisions with confidence.
Why the Quality of the Monthly Package Matters
Unlike a small business, churches operate under a unique set of expectations. Donors give sacrificially and voluntarily. Boards have a fiduciary responsibility. Pastors must balance spiritual leadership with stewardship. When the monthly financial package is incomplete or confusing, several issues may arise:
- Leaders lack a clear picture of available cash and committed funds.
- Restricted or designated gifts may be unintentionally misused.
- Budget overruns go unnoticed until they become a crisis.
- Leadership meetings become inefficient as time is spent clarifying basic numbers rather than discussing why they do not have the information they need.
- Trust between staff, volunteers and the congregation can be eroded.
Conversely, complete and useful financial packages provide clarity, direction and allow the leadership to move forward. Meetings will be shorter, and conversation can focus on the mission.
Essential Components of a Strong Monthly Financial Package
At Bellwether, we believe a strong and complete monthly financial package should include:
- Statement of Financial Activity vs Budget (Profit and Loss): This report presents your actual income and expenses against your budgeted income and expenses and highlights those areas of concern. It answers the question “are we living within our means?”
- Statement of Financial Position (Balance Sheet): This document reports the balance of the church’s assets and liabilities as of that date. It is a snapshot of your cash/investment balances, any debt and your equity position. It may be the means by which your church shows restricted funds and that is a measuring stick of how much of your cash is “promised” to funds/projects versus being unrestricted for operations. We strongly recommend that the church Treasurer or other leadership compare any asset (bank or investment) source statements to the numbers reported on this report on a regular basis.
- Notes and Narrative Comments: A short set of notes that explains unusual items, timing differences, large one-time gifts or expenses, restricted fund activity and any concerns that may require your attention.
- Bank Reconciliation Report: We provide a copy of the bank reconciliation report so that the Treasurer may review for any unusual activity and/or aged, outstanding checks. We strongly recommend that this report be compared to the actual source document (bank statement) by the Treasurer on a regular basis.
Why Does It Matter ….
Both Pastors and Boards need financial data, but perhaps for different reasons.
Pastors who receive a strong and clear financial package monthly have answers to questions like:
- Can we make payroll and cover our operating expenses coming up?
- Are we on track with the budget, or do we need to make adjustments?
- Are the designated accounts being used appropriately.
The Pastor’s heart is preaching and pastoring. Providing an appropriate financial summary each month frees the pastor to focus on his calling rather than financial details.
Boards and finance committees, who have fiduciary responsibility for good church stewardship, rely on clear financial reporting to:
- Monitor the overall financial health and trends.
- Ensure designated funds are properly tracked and spent.
- Identify potential financial problems.
- Make informed decisions about staffing, facilities, outreach and capital projects.
- Demonstrate transparency and accountability to the congregation.
When reports are clear and consistent from month to month, leaders will track trends over time rather than starting from scratch at each stewardship meeting. Discussions will become more strategic and focused versus speculative conversation because they do not have the correct or appropriate information.
What Bellwether Delivers …
At Bellwether Church Solutions, we design monthly financial packages to suit your needs beginning with these statements and adding others as are useful to you:
- KIP Charts
- Statement of Financial Activity Vs. Budget
- Statement of Financial Position
- Bank Reconciliations
- Others including Check Registers, Payroll Journals and Fund Reporting
We deliver these reports in clean, readable format in a timely manner each month.
Our goal is simple: to give pastors and boards the clarity they need without requiring them to become accountants. Accurate, timely, and understandable financial information – the practical way in which we help churches protect their resources and focus on their mission – just like the bellwether sheep assists the pastor.
A strong monthly financial package is not an administrative luxury. It is a stewardship tool. It protects the church from surprises, builds confidence among leaders and donors, and returns time and attention to the work of ministry.
If your current reports leave you with more questions than answers, or if preparing them consumes too much of your team’s limited capacity, it may be time for a better approach.
Would you like to see a sample of the monthly financial package we provide to churches? We are happy to share an example (with identifying information removed) so you can evaluate whether this level of clarity would serve your leadership team.
You can also schedule a complimentary conversation to review your current reporting process and explore options that fit your church’s size and needs. There is no obligation—just an opportunity to discuss how cleaner, more useful financial information can support the work God has called your church to do.
Contact us to request a sample package or book a free consultation. We would be honored to help your church keep good books so you can keep focusing on the mission.