If you keep a church's books, month end is the point where somebody asks for a report and you find out whether the numbers hold together. A checklist turns that into a routine. This one is in the order the work depends on: you cannot check fund balances until the bank is reconciled, and you cannot reconcile the bank until the deposits are right.
1. Tie every deposit to a count sheet
- Each service in the month has a signed count sheet.
- Each count sheet total equals a deposit on the bank statement, for the same amount.
- Each deposit is recorded in the books split by fund, as the count sheet shows.
- Cash received outside a service, such as event fees or facility use, has its own record and deposit.
A count sheet with no matching deposit, or a deposit with no count sheet, is resolved before anything else. The counting routine itself is in counting and depositing offerings.
2. Match giving platform payouts
- Download the platform's payout report for the month.
- Match each payout to the deposit in the bank.
- Confirm gifts are recorded at the gross amount, by fund, with processing fees as an expense.
- Note payouts for gifts made in the last days of the month that will reach the bank next month.
The entries are explained in recording online giving: fees, payouts and matching the bank.
3. Reconcile every bank, card and loan account
- Checking and savings accounts, including any account only one ministry uses
- Each credit card, with a receipt and a ministry purpose for every charge
- The mortgage or other loans, with each payment split between principal and interest
- Investment accounts, to the custodian's statement
Start from the statement and finish with a difference of zero. Look at the list of uncleared items when you are done: a check outstanding for several months, or a deposit that never cleared, needs a phone call. Bank feeds don't reconcile your books explains why accepting the feed is not the same thing.
4. Enter and check payroll
- Each pay run in the month is recorded: gross pay, amounts withheld, employer taxes and net pay.
- Net pay in the books equals what left the bank.
- Housing allowance is recorded as the board designated it, separately from salary.
- Payroll liability accounts show only amounts not yet due. An old balance means a payment or entry was missed.
- Staff costs are coded to the right fund and ministry area.
Which payroll deposits and returns are due, and when, depends on the church's circumstances; confirm the schedule with whoever prepares the filings. Background is in church payroll basics.
5. Clear bills, reimbursements and uncoded items
- Bills dated in the month are entered, including those not yet paid.
- Reimbursement requests have receipts attached and an approval from someone other than the person paid.
- Nothing is left in an uncategorized or suspense account.
- Every transaction has a fund. Run a report filtered for transactions without one.
6. Check fund balances
This is the step business checklists do not have, and the one church leaders care about most.
- For each restricted and designated fund: opening balance, plus gifts, minus spending, equals closing balance.
- The total of all fund balances, general fund included, equals total net assets on the balance sheet.
- No restricted fund is negative. A negative balance means the general fund has paid for something the fund could not cover.
- Transfers between funds have a written approval behind them.
- Cash and investments are at least equal to the total of restricted fund balances.
If the last line fails, restricted money has been used for operations, and leadership needs to know this month. See restricted, designated and general funds for why.
7. Compare giving records to the books
Total contributions in the giving records for the month should agree with contribution income in the books, fund by fund. Differences are easy to explain in the month they arise, for example a gift posted to the wrong giver or a date entered in the wrong month, and hard to find the following January.
8. Review, report and close the period
- Read the income and expense report line by line against last month and against the budget.
- Check for anything coded to an odd account, and for amounts with the wrong sign.
- Write a sentence explaining each large variance while you still remember the cause.
Then send the reports and close the month:
- Send the same reports, in the same order, on the agreed date.
- State which accounts were reconciled and through what date.
- Give the bank statements and reconciliation reports to the designated reviewer.
- Lock the period in the accounting software so later edits cannot change a month already reported.
- File the count sheets, statements and reports together.
The report packet is described in what a monthly financial report for church leadership should include, and the reviewer's role in internal controls for small churches.
When the close keeps slipping into the following month, it is usually a sign the role has outgrown the time one volunteer can give it. Church bookkeeping describes how an outside bookkeeper carries the same routine on an agreed monthly date.
