What’s the Best Way to Manage Your Church’s Finances?
Leading a church is no small task—it’s a mix of vision, compassion, and more late-night problem-solving than most people realize. As a pastor, you’re juggling sermons, pastoral care, and ministry planning, and now someone’s telling you to add “finance expert” to your skillset? It’s a lot, and I get it—it may not be what you signed up for.
But the truth is finances matter. They’re the backbone that supports everything from ministry programs to facility upkeep to community outreach. Without solid financial management, even the best intentions can run into roadblocks.
The good news?
You don’t need to become an accountant overnight.
It’s about understanding the essentials and putting systems in place that make managing church finances less daunting. And it all starts with having an accurate General Ledger (GL).
Think of a General Ledger as your church’s financial diary. It records everything: donations, expenses, bills, and savings. It’s where every transaction finds a home, neatly organized into categories like income, expenses, and assets.
A well-maintained GL ensures you’re ready to issue tax receipts, file your T3010, and make smart decisions about staffing, facilities, or ministry growth.
The big question is: what’s the best way to manage it? Here’s a breakdown of three common options, with their pros and cons, to help you decide.
OPTION 1: DO IT MANUALLY IN EXCEL
If you’re working with a tight budget and fewer transactions, Excel can be a simple and cost-effective solution.
PROS:
Affordable: Excel is often free (if you already have it), making it a great choice for smaller churches.
Customizable: You can tailor the spreadsheet to your church’s specific needs.
Easy to Start: No software learning curve—just basic spreadsheet skills required.
CONS:
Time-Consuming: Entering transactions manually can be tedious, especially if you’re juggling other responsibilities.
Error-Prone: Without built-in checks, it’s easy to make mistakes.
Limited Reporting: While you can create simple summaries, generating complex reports takes extra effort.
Who’s doing the work: If it’s you or a volunteer, someone will be dedicating their time to manage the books.
To make this option even easier, I’ve created a free downloadable Excel workbook designed specifically for church bookkeeping. It’s perfect for smaller churches just starting out. [Click here to download it!]
OPTION 2: USE BOOKKEEPING SOFTWARE
If your church has a larger volume of transactions or needs better reporting consider using software like QuickBooks Online (QBO), Xero, or Sage.
PROS:
Time-Saving: Automates data entry, bank reconciliation, and reporting.
Reports: Built-in tools make CRA filings like the T3010 and board reporting much easier.
Scalable: Works well as your church grows, handling increasing transactions with ease.
CONS:
Cost: Software typically involves a monthly subscription fee.
Learning Curve: It may take time to get comfortable with the features.
Who’s doing the work: Again, if it’s you or a volunteer, someone will be dedicating their time to learn the software, and then managing the books.
This option is great churches that have a qualified and dedicated volunteer that can really own and run with this responsibility. It’s relatively inexpensive as the software is the only financial cost.
OPTION 3: HIRE A PROFESSIONAL BOOKKEEPER
If balancing the books isn’t your calling, or there are no volunteers qualified to help, it might be time to bring someone in. Here’s why it’s worth considering:
PROS:
Relieves Volunteer Challenges: It can be hard to find (and keep) a volunteer bookkeeper, and the task can be overwhelming. A professional takes this responsibility off your plate.
Adds Professional Boundaries: If the arrangement isn’t working, it’s far easier to let go of a hired bookkeeper than to navigate awkward conversations with a dedicated volunteer.
Ensures Accuracy and Compliance: Hire an experienced bookkeeper and they ensure CRA compliance, correct payroll calculations, accurate tax receipts, and well-prepared T3010 filings.
CONS:
Cost: Hiring a bookkeeper is a financial investment and Pastor, Board, and Treasurer need to be all onboard.
Less Direct Control: Someone else is handling the books, which requires trust and clear communication.
Professional bookkeepers often use software like QBO, so you’re getting the best of both worlds—expertise combined with advanced tools. This option is ideal for churches that need support beyond what volunteers can provide.
“No matter which option you choose, remember that good stewardship is key”
What’s Right for Your Church?
Every church is unique, and so is the best way to manage your finances. No matter which option you choose, remember that good stewardship is key. A well-organized General Ledger isn’t just about staying compliant—it’s about equipping your church to serve, grow, and fulfill its mission.
Ready to take control of your church’s finances? Download the free Church Bookkeeping Excel Workbook to get started today!