Basic church bookkeeping is fairly simple compared to bookkeeping for a business. A business created for profit must produce a balance sheet and a profit and loss statement periodically. This requires using double-entry bookkeeping, where every transaction must be recorded twice, as a debit to one account and as a credit to another. Church bookkeeping, by contrast, can employ the single-entry method since as a nonprofit there is no need to create balance sheets or profit and loss statements. Another important distinguishing characteristic of church bookkeeping is the tracking of members' tithes and offerings. Since giving to a church is a charitable giving tax deduction, members usually request a statement of their giving at year end to use on their tax returns. It is important to keep track of member giving to provide this statement to each member.
In your ledger book, designate a column on the far left for the date of transactions, the column to the right of that for the description of transactions, the next column for revenues and the last column on the right for expenses.
Record (credit) your increases in the Revenue column, being sure to fill in the date in the date column and write an explanation for them in the Description column.
Record (debit) your decreases in the Expenses column, write in the date in the Date column and describe them in the Description column.
In a separate notebook, label a page for every member of the church.
Every time the church meets be sure envelopes are available for members to insert their tithes or offerings. These envelopes should, preferably, be labeled with the church's name and blank lines labeled for a congregant to write in his name, address, the date and the kind of offering--tithes, offering, building fund--and whatever other information the church administration deems useful.
Every meeting, after the offering is collected, the amount inside the envelopes should be confirmed with the amount written on the envelopes as they are emptied.
The funds should then be totaled and the amount should be recorded in the ledger under Revenues.
Using the now empty envelopes, record on each member's page the date and the amount of his or her offering.
There are software programs designed specifically for church bookkeeping that can make the job even easier (see Resources). Single-entry bookkeeping can also be accomplished using the single-column method where expenses are placed in parentheses to denote they should be subtracted from the balance. You can keep a running balance (although it is not necessary) as you would with a checking account--simply add revenue to and subtract expenses from your total.
- Derek Austria