When it comes to accounting software and churches, the most important idea to remember is to keep it simple. The key items I look for in church accounting software are:
- Does the software have a flexible chart of accounts which will allow one to drill down into the level of detail that the ministerial leadership and board are seeking to make healthy program decisions?
- Does the software create a clear audit trail for “fund accounting” purposes? It is imperative that all church accounting software have the capability to create sub-accounts or classes in order to report “restricted gifts” which have been received by the ministry for a specific purpose.
- Is there a payroll module available with the software? Each ministry needs to make a determination whether or not to outsource payroll or to bring the job in-house. Payroll taxes are critical for all employers and employees. It is much less expensive to process payroll internally; yet if your ministry is not on top of its compliance reporting or its due diligence, it may become an expensive proposition in which the Internal Revenue Service has the authority to hold individuals liable for errors.
- Does the software contain a module for capturing gifts and love offerings received from members and visitors? Does the software allow for coding which differentiates whether a gift is treated as a tax-deductible contribution or received from the sale of items, as in bookstore sales?
My personal experience has been that Intuit QuickBooks is an excellent choice for most ministries. It is the most cost-effective software I have found that allows for compliance, flexibility and reporting without costing a fortune to maintain and upgrade each year. My experience with the QuickBooks “Not-for-Profit” package is that the software was not designed for churches. I believe that Intuit will continue to refine and upgrade this new version’s capabilities, yet for now I do not recommend it unless you are willing to be a beta test group.
Another piece of the puzzle to consider is the need for database software which communicates with the accounting software or easily creates a report which staff or volunteers may use to generate annual giving reports. My field experience has been that the cost to maintain software such as LOGOS, Shelby and Raiser’s Edge is prohibitive and is not worth the investment. I have come to the conclusion that it is nice to be able to capture data, but if one does not have the staff to utilize the data, one creates an exercise in futility.
The website for Center for Congregations has resources that are helpful to ministries. While the center serves ministries in Indiana, its mission is to share resources nationally. Here is an article the center posted on ministry management software.