Is Church Accounting Software Necessary?
Church Accounting
When most people think of accounting, they think of taxes. Those who are more versed in accounting may think of auditing or US GAAP. What about those people who just need to account for their church or small business? Luckily they need not memorize the IRS tax code.
Accounting in a Nutshell
Accounting most likely started as humans tried to gather useful information about their lives. A nomad may have used accounting to track where the animals were moving. A farmer to track how his crop is doing. And an army general to track war movements.
Instead of using accounting as a tool, most think of it as busy work. This is probably because the nature of accounting has changed from tracking to compliance.
Church accountants don’t have to think of accounting as simply compliance. Surely they must comply with certain rules, but they can use church accounting software to track useful information for the church. That useful information could be Sunday School attendance, donations, or number of baptisms.
Many churches use fund accounting to help track useful information. A fund is simply money that is set aside for a certain purpose. A fund is not a bank account. You can have one bank account and still have many funds.
Why do Churches Use Fund Accounting?
When you purchase software from Staples, you can’t tell them what to do with your money. However, when you donate money to a church, you can specify you want the money to be used for missionary work, helping poor people, or fixing the church up. The church then sets up a fund for whatever you specified for the money you donated.
Church Accounting Software
Now that you can see that a church accounts for its money differently than a normal business, you can see the usefulness of church accounting software. This type of software makes it easy to set up and manage funds.
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