by Conrad Martin, Director of Finance
For some, trying to understand a financial report may be difficult or confusing. Let’s face it, not everyone has that gift. But congregations need to know the financial position of their church in order to make wise decisions. So what are some ways church treasurers can improve the communication of financial reports to their congregations?
- Make it relevant.
Who will be reading the financial report? Do they understand financial lingo? Do you perhaps need to train your readers on what is important on a financial report? Do they prefer financial reports in spreadsheet form or by a narrative? It will be helpful to ask the reader what financial information they need to do their job.
Any good accounting program should have the capability to produce a variety of reporting formats. Giving the church council a 10-page, detailed financial report will probably not be of interest to them, so determine what information you can put into a one-page summary report that will give them what they need. The finance committee, on the other hand, may want more detail. If you need to provide a financial report for the general congregation, understand that many of them will not understand a finance report in spreadsheet form, so think about how you can convey the finances of the church in a narrative form.
- Make it accurate.
Mistakes do happen, even for a good treasurer; yet if a pattern of needing to correct financial reports develops, you could lose the trust of those needing your financial information for making decisions. Your credibility is on the line every time you present a financial report.
Always double check your work, to ensure that the correct amount has been recorded to the correct account. Look for expense accounts that are significantly off budget (whether high or low), ensure that they are actually correct and be prepared to explain why they are not on budget. There may be an easy explanation and having that ready helps build confidence in your reports. Always remember that your church council may be using your financial report to help determine the direction of the ministry. That’s why accuracy is so important.
- Make it timely.
When financial information is received late, it may be useless to the reader, or even as detrimental as incorrect information. Determining why a report is not timely will go a long way in correcting that. What is causing the delay?
Are you waiting for financial statements from banks or investment companies at the end of the month? A conversation with them about changing the reporting dates may give you statements sooner. Reconcile these statements with your records as soon as you receive them, so that you have time to make any needed corrections before your reports are due. Are you waiting for church staff to turn in their expense reimbursement claim forms at the end of the month? You may need to turn to a higher authority for that one. Try to be up-to-date as much as possible with your recordings before you go on vacation, so you don’t have so much catch-up to do when you return. Are you overworked, have a conversation with your church leaders about the expectations for time to be spent on the financial reporting.
Keeping good financial records and communicating them well allows your ministries to run smoothly.
These keys were expanded on and drawn from the article “Three Keys for Communicating Financial Information” by Vonna Laue in ChurchFinanceToday. Volume 26. Number 10. October 2018