• Church accounting procedures are very similar to the accounting procedures used for most nonprofit organizations. Many churches have high volumes of cash or checks coming in over the weekend, as this is the normal time for services and collecting tithes and offerings. Churches usually prepare basic financial reports, either monthly or annually, for members to review the income and expenses collected and reported by the church. Although most churches are exempt from paying taxes by filing a nonprofit Internal Revenue Service form, they are usually required to maintain accurate financial records.
  
  

Budgets

• Most churches develop budgets for the various needs or committees in the church. Individual budgets are prepared to ensure each church function does not become too costly. Many churches run programs like AWANA, vacation bible school or local community outreach ministries. Each of these functions will have an individual budget. These budgets will be rolled into one master budget for the church to review at one time. Church members may be allowed to comment on or approve budget items through general votes during church business meetings.
  
  

Fund Accounting

• Fund accounting is a common type of accounting method used in churches. Churches may break out the income streams and assets for the different types of ministries in the church. Missions, building donations, food banks and other local or international ministries are common church funds. Churches break out these ministries to ensure each one is able to generate the income needed to operate and supply funds for any expenses. The pastor or administrator may wish to delegate certain percentages from the church's general fund for these projects or allow members to give tithes and offerings to each fund through special envelopes used during church services.
  
  

Internal Controls

• Internal controls are an essential bookkeeping tool for churches to use when safeguarding financial information. These controls may include limiting the number of bookkeeping tasks one employee completes in the church office and which individuals are allowed to authorize or sign the church's business checks. Cash controls are extremely important because churches may have lots of cash in the office early in the week. Bank reconciliations are also important; these reconciliations ensure all money has been correctly deposited at the church's bank in a timely manner. Churches may also choose to use a computer software program for tracking financial information. This can reduce the number of users having access to important data.