Blog

Sanford Levings

"Hi, I’m Sanford Levings, President of MinistryCFO and author of this blog. The purpose of our blog is to share with you information and insights that we gather from working with and listening to our clients and partners, located throughout the country." read more

Services MinistryCFO Provides for Mid-Size

 Let Us Help You Transition to the Next Level

figure-climbing-graphIt seems like it always happens overnight. A start-up fledgling church is no longer a start-up fledgling church. The church purchases a building, obtains a mortgage loan, and moves to two services – all in the same month.  Two, three, maybe more full-time employees join the staff.  The church is suddenly a mid-size church.

In this moment, the financial operations become more important to the church because the lending bank requests annual audited financial statements, and/or the stewardship committee suddenly realizes that things are suddenly different and the previous financial operations and oversight, or lack thereof, are no longer sustainable.

At MinistryCFO, this is often the scenario we experience when we first engage with mid-size churches.

The transition typically involves the following:

Financial Operating Upgrade

  • A review of the chart of accounts and a consolidation (simplification) of the financial statements 

  • Accounting cleanup on the fixed assets of the church so that they are recorded in accordance with GAAP (generally accepted accounting principles) 

  • Systems enhancements, such as a move to a new church management database and a more complete utilization of the church management software modules 

  • Monthly financial reports that are presented on a timely, accurate, and understandable basis, as now requested by the lending institution 

  • Facilities now becomes its own Department classification 

More Sophisticated Budgeting 

  • At MinistryCFO, we know revenue and expense norms and we share this  information with our clients. 

  • The lending bank appreciates the planning process because the ability to meet monthly debt service is critical. 

Governance and Liability Insurance Upgrade 

  • Suddenly, much more is a stake.  The $3 million facility must be insured.  General liability suddenly increases tenfold. 

  • Directors and Officers insurance and Errors & Omissions insurance coverage quadruples. 

  • It’s time to methodically review the church bylaws because much more is now at stake. 

  • Renovation expenditures must be properly recorded and monthly Depreciation Expense becomes a new expense line item. 

The three-year capital campaign kicks into full gear.  

Basic Bookkeeping can no longer sustain the church.  

  • CFO level oversight is needed to record the more complex transactions, assist in the new governance and liability issues and make sure that financial statements are timely and accurately generated. 

  • CFO level oversight is need to interact with the lending institution, the CPA auditors, the board members, the capital campaign consultants and the insurance agent.

 

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