Having Many Ministries Leads to an Unwieldy Chart of Accounts
Anyone who has worked in church finance and accounting knows that churches have unique and specific needs. Nearly all churches, especially growing ones with expanding operations, have ministries. They may have dozens, or they may have fewer than ten. These ministries might include Music, Worship, Children, Youth, and many more. Often they have hierarchical relationships where one ministry will roll up into another one. We typically see 2-3 layers of hierarchy, but have also seen as many as nine!
With legacy accounting software – think ACS, Shelby, or even QuickBooks – there is no built-in architecture or structure that allows church back-office teams to track and report by ministry without creating separate accounts for each of these segments. Other segments churches might want or need to track include locations, restricted and unrestricted funds, seasonal activities, bookstores, cafés, etc. Adding a separate account for each segment creates a large and unwieldy chart of accounts. We’ve seen large churches with 400 separate accounts all the way up to more than 2,000! Expansion to new locations can start to double or triple the number of accounts.
The Dangers of Excel in Financial Reporting
These various segments generally can’t be selected, either individually or in groups, when reporting out of legacy software systems. Instead, you tend to get everything in one big report and then spreadsheet programs have to be used to manipulate the data and sort out the segments. If you want to find a black belt in Excel, start in the accounting department at a large church. As great a product as Excel is, there are dangers in using it as a financial and operational reporting tool. Manual manipulation of data can lead to mistakes. How do you ensure which version of a spreadsheet is the source of record when team members are sharing and editing the same file? And let’s not forget the tremendous amount of work it takes to do all this data manipulation when, in the end, the data isn’t even real-time or current.
Dimensions Are the Answer
Modern accounting solutions, like Intacct, are built in such a way that you can create “Dimensions” for the various ministries, locations, departments, grants, funds, and other segments. Transactions can be tagged with certain Dimensions. Controls can be put in place that limit the options for a given transaction or user, which helps maintain accurate data. As a result, reporting is much simpler, more powerful, and more accurate. Individual or multiple Dimensions can be selected for reporting, and Dimensions can be grouped together. Spending and budgets can be seen by ministry, or if a ministry leader is responsible for more than one ministry or even more than one location, reports can be tailored to deliver only the applicable data to that ministry leader, and church leaders and board members can get a higher-level view of the financial data.
“Intacct is, at the end of the day, a ministry tool”
– Church Executive Magazine, 2016
Find out how one of the largest churches in the country came to select Intacct for their accounting package, and how truly transformational that process has been for them. Gateway Church in the Dallas/Ft. Worth area partnered with AcctTwo to implement Intacct, and has taken advantage of its dimensionality, ease of integration, budgeting capabilities and analytics. Read the full story here.