How to Set-up a Finance Department

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How to Set-up a Finance Department

• By
• Belinda Whitfield
• Certified Public Accountant

2
Starting Your Ministry

• Choose Board Members
• Get Incorporated (Secretary of State)
• Obtain Tax ID (IRS.gov)
• Open Bank Account
• Register with Attorney General

3
Starting Your Ministry

• Apply for your 501c3 (850)
• Register with Dept of Revenue/Taxation
• Apply for Sales Tax Exemption

4
Annual Reporting

• Secretary of State Update list of board
  members.
• IRS 990 (990-N or 990-EZ) for most non-profits.
  Churches are exempt.
• State Attorney General Annual Report. Check
  for Church Exemptions in your state.
• Keep your address current with each agency.

5
Tools for Success

• File Management System
• Accounting Program
• Membership Database Program
• Policies and Procedures

6
Tools for Success

• Internal Controls
• Stay In Compliance with IRS and State
• Training

7
File Management System

• Corporate Records
• Contracts
• Deposits
• Paid Bills
• Bank Statements

8
Accounting Program

• Tracks church finances and payroll
• Generates Reports
• Recommended Programs
• Peachtree Complete Accounting
• QuickBooks Pro
• QuickBooks Online

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Membership Database

• Tracks church members contact info
• Tracks contributions
• Generates Contribution Statements
• So much more

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Policies and Procedures

• Finance Department
• Counting Team
• Membership Data Management
• Staff and Volunteers guidelines for requesting
  money, returning receipts, etc.

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Internal Controls Segregation of Duties

• Ushers
• 2 people with the at all times
• No tampering with envelopes
• Petty Cash for head usher to make change.

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Internal Controls Segregation of Duties

• Counting Team
• Counts the money
• Prepares the deposit
• Secures the deposit
• Provides a Report

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Internal Controls Segregation of Duties

• Bank Deposit
• 2 people with the money.
• Secure money bag

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Internal Controls Segregation of Duties

• Data Entry
• Posts offerings to membership database
• Prints report for total offerings by fund

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Internal Controls Segregation of Duties

• Bookkeeper
• Posts offerings to accounting system
• Compares deposit slip to data entry report

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Internal Controls

• Keep Church Personal Finances Separate.
• Adopt an Accountable Plan.
• Receipts are required for reimbursements
• Receipts must be returned within a reasonable
  time frame when money is given in advance.
• Transactions are not reported on W-2

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Internal Controls

• Document All Transactions With Receipts.
• Pay by Check or Church Credit Card.
• Get Receipts for all credit card transactions

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Internal Controls

• Use Church Credit Card for Church Purposes Only.
• No ATM Card.
• Record credit card transactions in detail.
• Reconcile bank accounts.
• Reconcile credit card accounts.

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IRS Compliance

• Pay Fair Reasonable Compensation.
• Pay Employees Through Payroll Accounting System.

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IRS Reporting

• Quarterly Payroll 941s or 944s
• Annual 944s must be IRS approved.
• Year End Payroll W-2s
• 1099s

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Contribution Statements

• Year End Contribution Statements
• Details by date and amount
• Include check s (optional recommended!)
• Statement No goods or services were provided in
  exchange for monies received

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Training

• Inexperienced? Seek professional assistance
• Software Tutorials
• Online Training
• One-on-One with a professional

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Questions and Answers
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Belinda Whitfield, CPAWhitfield Associates
LLC630-759-6900 ext. 710Visit My
Website!ChurchCPA.com