Читать книгу Removing the Mysteries about Church Finance - Jerry L. Johnson - Страница 17

Finance

Financial management skill is used to evaluate projects to obtain the best result among various choices. These skills are used to get the most value from each dollar, and to seek alternatives to cash outlays. It is here that theory and reality can have a head-on collision. What creates financial health for a church: accountability and transparency?

In theory, if it makes people feel good, is sponsored by the church, helps people, so it must be spiritual; then it must be worthwhile, and if it is all that, God will provide. I am not speaking for God in this matter. I can only point to many such endeavors that failed and one must wonder was God in it, did He withdraw his support, or did someone misread? Let’s go back to finance, so we can learn to use financial tools, and you are still encouraged to keep God in it.

Cash Management – Cash on hand (in the bank, of course) is required for transacting business even though bills are usually paid with a check (paper, or digitally) or a credit card (which will still have to be paid). The church can take advantage of trade discounts or purchase discounts (20%-off sale, for example) for items required in church operations. Available cash is needed for unexpected situations such as church bus breaking down, hurricane restoration, coronavirus pandemics and other situations for which advance planning for the specifics cannot be anticipated. The church should maintain a cash account balance that is enough to cover current debts and payments. Since cash is a factor of tithes and offerings, which themselves may be subject to wide swings in their amounts, the business manager needs to make a cash forecast.

Don’t confuse this with net income. Cash may be in designated accounts or designated for specific purposes. It is cash, nevertheless. Use this to balance what’s available against anticipated demands.

b. There may be, say, $14,000 in the bank account, all of it designated for putting a new roof on the Sunday School building. Before using this $14,000 for anything other than a new roof, no matter how dire the need, the pastor must obtain permission from those who gave the money to use it for a different purpose. To do otherwise is to violate a trust between church leadership and the membership. However, so long as the $14,000 is in the bank, it remains part of the cash flow of the church.

Net Income – This can be called “uncommitted income” or “unused income” but it is simply what is left after all demands (bills) for payment have been met covering a specific time period, such as a month or year. To finish the month and the year with a net income, even if it is small, is essential. The foolish grasshopper consumes everything it has. The wise ant stores up food (resource) for a leaner time. Even so, a church can go bankrupt while showing a net profit on paper. The reason: cash flow. This is only possible however when the accounting is set up on an accrual basis (you count what is owed to you as income even though it is not yet received). Using accrual basis can show a good net income but still there may be no actual cash. Remember, churches are set up on a cash basis, not accrual; accrual being extremely rarely used by churches.

Margin – This is a percent figure that we will use more later. But first you need to know how to obtain the percentage. To figure income margin, take the total income figure, in this case let’s say that it was (for example) $391,000, and subtract the total expenses. The resulting number is net income. In this case $11,730.