Minding and managing a congregation’s financial resources requires knowledge and skills that many staff and volunteers must learn on the job. We have resources and guidance for you.

Common Mistakes

Postponement

It’s easy to get overwhelmed, which can lead to postponing financial tasks, feeding an unproductive cycle. Financial reporting is intended to answer questions about the congregation’s financial resources and health. Getting clarity about your questions will help you determine the type of information and reporting you need. Help is available!

Inertia

Sticking with account names and line items, even when they no longer are actively used, clutters reports and is distracting. Periodically, form a team of stakeholders to rigorously review, prune, graft, and retrain the Chart of Accounts, as you would a fruit tree.

Recall the Groundwork

Lay the groundwork for your leadership in Congregational Finances.

People

Priorities

Risk

Boundaries

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Support

Key Resource Page

Check out the Money Matters section of LeaderLab. You’ll find articles on everything from financial reporting to staff credit cards, petty cash to restricted accounts, and much more.

Resource People

• UUA Treasurer Support Team: Experienced treasurers can help with a wide range of treasurer and finance leader inquiries. (For employment-related matters, however, see Congregations as Employers.)

• UU-Money Listserv is a longstanding discussion form for finance leaders.

Financial Policies

For protecting the institution, staff, and congregants

• Segregation of Duties and other financial controls: What could someone do that could damage the institution based on access to accounts, information, cash, etc.? Examples: 
  • Separation of Bookkeeping & Check Signing Authorization
  • Separation of reporting and financial oversight
  • Who has access to spend money (accounts, credit cards, etc.)
  • What are the limitations on spending and who has the authority over individual accounts.
• Staff Credit Cards
• What financial policies are in place and who has the authority to change policy?
  • Is there an internal review or audit that is required? (Note: an external review can further protect the organization and staff. Consider arranging an informal “intramural” review among congregations in a cluster.)
  • Is there a review calendar for policies?

Financial Reports

For creating a picture of the financial health of the congregation

See Financial Reports in LeaderLab, which describes:

• Income Statements

• Balance Sheets

• Cash Flow Reports

• Dashboard Reports (follow link in article)

What you want to know drives the type of report you want to create.

IRS Compliance and Nonprofit Regulations

• Is there any Unrelated Business Income, such as rental income, and is it being reported properly to the IRS?
• Do you understand your tax-exempt status? (Congregations are tax-exempt, regardless. But getting your own 501(c)(3) determination letter from the IRS unlocks discounts and other advantages. The UUA does not provide “umbrella” status to congregations.)
• Be sure you understand payroll taxes. Congregations pay Social Security and Medicare taxes for non-clergy employees but not for ministers.

Help!! I’m not an accountant. How do I approach financial reports?

Thanks for this advice from wave cohort member Scott Bruslind, a longtime finance leader in his congregation.

Big Picture

Build relationships with others involved. Find helpers. Emphasize transparency, accessibility, and relevance. See the Financial Reports section above.

Financial Activity

Financial activity provides a monthly snapshot of the cash flow tide: its ebbs and flows. Don’t jump to conclusions, as transactions might occur at the arbitrary end of month, but consider trends over several months and look that balances in cash accounts are sufficient to cover usual monthly expenses. Prioritize payroll first.

Financial Position

This captures the view on a longer timeline. At its core, it indicates wealth: accrued value less obligations (debt or other liabilities). A Balance Sheet maps relationships that often don’t appear in monthly activity. Custodial accounts reflect outreach, initiatives, and responsibilities. An important, but often underreported, relationship is depreciation. Buildings need maintenance and an accurate depreciation account provides good budgeting forecasts for repair and replacement.

On reviewing a long column of income and expenses

Financial work is often a matter of triaging priorities. Find the largest numbers in the column and work from there. Get comfortable putting each number in context from month to month. Charting can help visualize predictable patterns.

What’s not reflected in financial statements?

Decisions and assumptions made constructing the Chart of Accounts are not always obvious. Communication between the bookkeepers and end users is key to explaining the logic of a Chart of Accounts. Over time, needs change and the Chart of Accounts can be revised accordingly.

There are stories behind each accounting line item. The best financial statements summarize those stories, distill them to their essence, and help leaders make good decisions.

Again, see Financial Reports in LeaderLab, including the link to Dashboard Reports, and get help from the Resource People listed above.