Communicating Church Finances: 10 Best Practices (Part 1)
When it comes to managing church finances, transparency and effective communication are key indicators of good stewardship. Whether it’s sharing finances with the board of directors, church staff, or the congregation, clear financial communication builds trust, ensures informed decision-making, and supports the overall health of the church.
Join us as we explore five of the best practices for communicating church finances effectively. By implementing these practices, you can foster a culture of financial transparency and engagement within your church community.
How to Communicate Church Finances (Part 1)
Churches are expected to adhere to very high standards with regard to their finances. After all, tithes and offerings that are given to the church are meant to help build God’s Kingdom, and this requires an extra level of stewardship and responsibility.
Let’s take a look at five practical steps your church can take to ensure this communication is clear and well-received.
1. Transparency and Openness
The foundation of effective financial communication is transparency. Churches must provide complete and honest information about their financial status—including all positive and negative aspects. This openness builds trust among the congregation and leadership, as it shows a commitment to honesty and accountability.
Transparency also means making financial information accessible. Financial reports should be easy to find and understand. Be willing to answer questions and ensure stakeholders understand important data.
Consider emailing reports or even creating a dedicated section on your church’s website where members can access financial updates. Consistent and open communication can prevent misunderstandings and build a stronger, trust-based relationship with your congregation.
2. Regular Reporting
Regular financial reporting is essential for keeping everyone informed and engaged. Establish a routine for sharing church financial updates. These should include monthly, quarterly, or annual updates. This allows stakeholders to track progress and identify trends over time.
Consistent reporting also creates a culture of proactive financial management. By frequently reviewing financial data, church leaders can make timely adjustments and address any emerging issues before they become significant problems. This practice not only keeps the church financially healthy but also demonstrates responsible stewardship to the congregation.
3. Clear and Simple Language
Financial reports can be intimidating, especially for those without a background in finance. To ensure that everyone can understand the information being presented, use clear and simple language. Avoid jargon and technical terms that might confuse non-experts.
Explain financial concepts in plain language and provide definitions and context where necessary. For example, instead of just listing numbers, explain what they mean and why they matter. Use real-world analogies and examples to make abstract concepts more relatable. The goal is to make financial information accessible to everyone, regardless of their financial literacy level.
4. Detailed Budgets and Actuals
Presenting detailed budgets alongside actual financial performance is crucial for transparency and accountability. A detailed budget outlines the church’s financial plans, including expected income and expenses. Comparing these projections with actual performance helps identify variances and understand the reasons behind them.
Highlight significant differences between budgeted and actual figures and provide explanations. This practice not only informs stakeholders about the church’s financial health but also encourages responsible financial planning and management. It shows that the church is committed to staying on track and making necessary adjustments when needed.
5. Visual Aids and Summaries
Not everyone easily understands accounting terms and information. That’s why using visual aids such as charts, graphs, and infographics can make complex financial data more understandable and engaging. These visual representations help people grasp trends and patterns quickly, making it easier to communicate key financial messages.
In addition to visual aids, provide executive summaries that highlight the most important points. Summaries cater to those who may not have the time or expertise to dive into detailed reports. By presenting information in a concise and visually appealing manner, you can ensure that key messages are communicated effectively.
How to Create a Culture of Transparency
Implementing these five best practices—transparency and openness, regular reporting, clear and simple language, detailed budgets and actuals, and visual aids and summaries—can significantly enhance the effectiveness of financial communication in your church.
Partnering with a church financial experts like Finch Accounting can ensure that your financial statements are accurate and reported regularly. For a fraction of the cost of hiring a church accountant, you can have a team of accountants and analysts provide your church with monthly financial statements that include bookkeeping, payroll, and budgeting.
By partnering with the financial experts at Finch, you build trust and ensure that all stakeholders are informed and involved in the financial health of your church.
Corey has 10 years of professional experience in financial planning and analysis. His previous areas of focus involved helping launch the Financial Services department of a large government contractor, where he developed the various reporting and budgeting systems.
Corey also actively manages Shorebird, a Registered Investment Advising firm that focuses on Financial Advising, Planning, and Investment Management for clients. He is also an adjunct finance professor at the University of California, Riverside for their graduate-level programs.
Corey received a B.A. in Business Administration at the California State University, San Bernardino; a Masters in Business Administration and a Masters in Finance from Indiana University’s Kelley School of Business.
Jonathan has more than 7 years of professional experience in corporate taxation and strategy with both public and private companies. His industry experience includes entertainment, church finances, medical device, and technology. Jonathan is also an adjunct professor at the University of California, Riverside (named a Best Business School by Princeton Review and named a Best Undergraduate Business School by Businessweek) and speaks at conferences on topics such as leadership and management.
Jonathan is a graduate of the University of California, Riverside and an MBA candidate at UCLA Anderson School of Management. He is a licensed Certified Public Accountant (CPA) in California.
Jonathan previously worked at PricewaterhouseCoopers, LLP where he specialized in corporate taxation.
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