The one financial related shelf document I’d like you to have is our book, Parish Finance — otherwise, your church budget should be in your desk, not on your shelf! I am joking about the book, but not about the budget!
Tip 8: Keep the church budget at your desk, and not on a shelf!
Often, the budget is prepared, discussed, approved by a Finance Council or Vestry, and entered into the accounting system. After the fiscal year starts, budget reports are generated either monthly or worse, quarterly.
However, there is a problem. Budget reporting and review processes often miss the most important value-add that the budget brings to an organization. Along with being the plan for revenues and expenses, a budget should be used as an active management tool to review whether church finances are aligning to the pastoral priorities outlined in the budget development process.
The question I’d like you to consider is, “How is the budget used as a tool and not just a monthly revenue and expense report?”
Most budget reports show a series of columns that usually include at least the budget plan and actuals for a given time period. When budget management is merely mechanical, it loses the most important power of budgeting – helping you manage priorities!
As the pastoral leader, I am not (necessarily) recommending that you need to check the budget every day, but, at least at regular intervals, answer the question, “Is the budget meeting the priorities we outlined when we created it?”
Stay Tuned – More to come on this topic when we discuss budget execution and control in the coming weeks!
Questions/Comments? Email Mike Castrilli at mjcastrilli@gmail.com!
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