There are a lot of financial reports out there. They are all important, but some more so than others for most churches. Pastors and church leaders typically have many daily tasks at any given time, so wading through all the reports to figure out what to pay attention to is not often possible, practical or efficient.
When it comes to financial reports, here is our advice on what the most important things to focus on are:
- Profit and Loss (P&L) Statement and balance sheet. These are top financial reports to look at each month. Your bookkeeper can send you an even more detailed report, but it does take time to go through all of those numbers. These two reports will help you see the big picture of your church’s finances on a regular basis, and allow you to easily make comparisons to prior time periods.
- Look at key figures. Pay attention to income versus expenses to see if you’re spending too much money. If you are, you’ll be able to see where your expenses excessive. If you watch income trends from month to month and compare it to the same period from last year, it will give you a good sense of what to expect year to year. The balance sheet gives you an overall picture of your church’s accounts and balances so you can determine where you stand when it comes to the bills that are due in the near future.
- Know why it matters. As a church leader, it’s important to know where your church is financially and where you are headed. Many churches have visions of new buildings, paying off debts, adding staff members and ministries, and more. But it’s difficult to get there if you don’t know how much value the church has (assets) versus how much debt the church owes (liabilities). Keeping tabs on these two reports will show if your church is spending more than you are bringing in (net income/loss).
If what you see on any of these reports is not what you want, then it will be time to really get into the details with your bookkeeper to figure out what’s going on and how to fix it.