Is Your Church Exhibiting Any of these Symptoms?
Many of our clients approach us when they realize that their church’s financial recordkeeping (or lack thereof) is in a mess. That’s ok, we’ve experienced it all and we embrace the challenge. Our mission is financial operating excellence and so we want all churches everywhere to operate smoothly. We love to celebrate when we have “righted the ship” for our clients.
We rejoice as our clients experience the new found freedom of functional operations, clarity in reporting, and clear direction regarding all things.
Nevertheless, it would be far better for our prospects and clients if we could communicate, as early as possible, the telltale signs that the financial operations are in trouble.
In talking with prospects, we have uncovered these common telltale signs that their bookkeeping has, indeed, run amok:
1) Financial Reports are Not Available: Earlier this year, I was meeting with the stewardship team of a church prospect (which later became a client) and I asked the team about the quality of the financial reports they were receiving. At first, nobody answered the question and finally a committee member chuckled and said: we don’t really receive any reports. Ouch! Result: The stewardship is limited to operating on intuition only, with no hard and fast financial numbers to guide them.
2) Financial Reports are Outdated: In another prospect meeting, I asked the same question regarding the quality of financial reports. Again, a delayed response and then a committee member said: our reports are always about three months behind the current time. Ouch again! Result: Delayed financial reports are a telltale sign that the financial operations are being run on a reactive, rather than proactive, basis. The validity of these outdated financial reports are suspect as well.
3) Financial Reports are Too Lengthy: On a number of occasions, prospects will hand me a Profit & Loss Statement that is lengthy – four or more pages long. I’ve actually been handed a P&L Statement that was twenty pages long! Result: Lengthy statements mean that the bookkeeper or bookkeepers have no financial oversight. Each time an unrecognized transaction comes to the bookkeeper, he / she is likely creating a new income or expense account rather than deciding where to record the transaction in one of the existing accounts. At this point, nobody is reading the lengthy statements because there is too much information to possibly understand.
4) The Numbers are Obviously Not Adding Up: I was visiting with one client and found myself in awe at the beauty and size of their facility. It was readily apparent that their facility cost somewhere in the $10 million plus range. Soon after the visit, I received their balance sheet and saw that only $2 million was recorded to Land, Building & Equipment! Immediately, I knew that our team was going to have quite a lot of work to do in order to get their financial statements and operations corrected. Long story short: We accomplished the task and the church now has new found clarity.
At MinistryCFO, we move churches away from complexity toward simplicity. Without simplicity, the leaders of your church are going to ignore your financial statements, and frankly, you and your staff will ignore your financial reports, as well. Keep in mind that complexity results in confusion, while simplicity brings clarity.