Many churches have been around for dozens of years, even centuries. Because of the longevity of some of our churches, it is often very difficult, if not impossible, to create a standard set of financial statements for them. That is why many churches, if they are new or old, will opt for a type of financial statement called a "Statement of Receipts & Disbursements". This type of statement basically categorizes the inflows and outflows of the church checking account into amounts that are presented in a formal financial statement. In essence, each transaction that occurs in the church's check register or checking account bank statement is categorized, totaled, and presented on a financial statement.
Depending on the volume and size of transactions, the period covered by the Statement of Receipts & Disbursements may be a month, a quarter, six months, or a year. My personal opinion is that because we do not go to church to present financial statements, a statement should not be presented to the congregation any more frequently than quarterly, and preferably, just semi-annually. That is not to say that the presentation of the information is not warranted or important, because it is both; it is only to say that the church has much, much more important business to tend to than reviewing financial statements.
When preparing the Statement of Receipts & Disbursements, the name of the church, and the time period covered should appear in the heading of the statement. Next, the major source of inflows that comes from the members (in my church we call it "tithes and offerings") is identified, along with the amount, then, any other sources of income are identified, along with the amount. If the other sources of income are not meaningful or substantial to the financial statements, you may just lump all of the other sources of income together and call it "other income". Because this is a receipts and disbursements statement and not an income statement per se, amounts that are not "income" could in fact be "inflows". An example of this is loan proceeds. The statement of receipts and disbursements should mirror the checking account, so if loan proceeds to the church were deposited in the church's account, the inflow should be reported, as a separate line item if it is significant.
Likewise, when loan payments are made (such as for a church building mortgage), those payments are recorded on the statement as outflows. All other major categories of expense and outflow are also reported on the statement, such as personnel expense, rent, utilities, etc. I discourage any church from categorizing and displaying very minor expense line items on the statements, as it takes away from the larger, fuller meaning of the statements when focus is put on minutiae.
The bottom of the statement should show the net change in the checking account, which is the sum of the total inflows, less the total outflows. The net change for the period, plus the balance at the very beginning of the period, should equal the checkbook balance for the end of the period being reported on.
Information that should be reported in addition to the Statement of Receipts and Disbursements may include period end balances of all deposit and loan accounts. Often it is helpful to show the net difference between the deposit and loan accounts, and compare it to prior quarter or year end balances. This comparison will show the members how the church's finances are trending.
Depending on the volume and size of transactions, the period covered by the Statement of Receipts & Disbursements may be a month, a quarter, six months, or a year. My personal opinion is that because we do not go to church to present financial statements, a statement should not be presented to the congregation any more frequently than quarterly, and preferably, just semi-annually. That is not to say that the presentation of the information is not warranted or important, because it is both; it is only to say that the church has much, much more important business to tend to than reviewing financial statements.
When preparing the Statement of Receipts & Disbursements, the name of the church, and the time period covered should appear in the heading of the statement. Next, the major source of inflows that comes from the members (in my church we call it "tithes and offerings") is identified, along with the amount, then, any other sources of income are identified, along with the amount. If the other sources of income are not meaningful or substantial to the financial statements, you may just lump all of the other sources of income together and call it "other income". Because this is a receipts and disbursements statement and not an income statement per se, amounts that are not "income" could in fact be "inflows". An example of this is loan proceeds. The statement of receipts and disbursements should mirror the checking account, so if loan proceeds to the church were deposited in the church's account, the inflow should be reported, as a separate line item if it is significant.
Likewise, when loan payments are made (such as for a church building mortgage), those payments are recorded on the statement as outflows. All other major categories of expense and outflow are also reported on the statement, such as personnel expense, rent, utilities, etc. I discourage any church from categorizing and displaying very minor expense line items on the statements, as it takes away from the larger, fuller meaning of the statements when focus is put on minutiae.
The bottom of the statement should show the net change in the checking account, which is the sum of the total inflows, less the total outflows. The net change for the period, plus the balance at the very beginning of the period, should equal the checkbook balance for the end of the period being reported on.
Information that should be reported in addition to the Statement of Receipts and Disbursements may include period end balances of all deposit and loan accounts. Often it is helpful to show the net difference between the deposit and loan accounts, and compare it to prior quarter or year end balances. This comparison will show the members how the church's finances are trending.
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