Finding the right church accounting software can feel like searching for a needle in a haystack. Especially with so many options not suited for smaller to mid-sized congregations.

But don't worry, we've got you covered! We'll walk you through the key features to look for when searching for the right accounting software for your ministry.

1. Must Have Church Bookkeeping Features

The first thing you need to consider when looking for the right Accounting software is whether it has the right accounting features for your ministry. You need the following:

Fund Accounting

Fund Accounting is an accounting system used by churches and nonprofit organizations to track the money allocated to a specific fund (i.e. designated for a specific purpose or program). Fund Accounting prioritizes accountability over profitability. It keeps track of where money comes from, where it's going, and how best to use it.

What’s the Difference Between Fund-Based Accounting (Used by Churches) and Business Accounting?

In a business, income can be applied to any part of the business. Every dollar a company takes can then be used to pay an employee's salary, pay utilities, buy a new computer, update the decor, boost a Facebook ad, etc. As long as the business pays its taxes, the remainder of the profit can be used however the business leaders choose.

A good software solution in the business world would be something like Quickbooks. You're probably thinking...

If it works for a small business, it should work for my church, right?

Yes, but your church doesn't need complex accounting. Double-entry accounting software programs like Quickbooks are overkill for the vast majority of churches!

Check out our blog Quickbooks for Churches: The Best Accounting Software.

Churches and nonprofits are held to a different standard. In churches, donors often give to designated ministry funds like missions, education, or raising money to buy a building. Monies given to these programs have to be used for what they are designated for. It's about giving the donors the assurance they need that their donations are going towards the mission of the church.

Since donors give to specific funds, we need an easy way to mark which donations go to which fund and how much money has been set aside for each fund. This is where Fund Accounting software comes in and that leads me to the next core feature...

Donation Tracking

Keeping track of your donor's contributions is key for financial transparency. The right church Accounting software needs to be able to collect and track all available avenues of giving; from online giving, to collecting loose cash offerings, to recording good old-fashioned checks. With all of the available giving avenues out there, it's important to be able to track and manage the donations seamlessly. This will also come in handy when you want to thank contributors for their generous donations or for generating year-end Giving Statements!

Expense Tracking

Not only will you need to be able to record incoming contributions, but you'll also need to manage and categorize expenses. Expense tracking is crucial for a number of reasons. First and foremost, you'll want to ensure spending always aligns with the church's budget and financial plans. It also provides a clear picture of how funds are being used, which is important for full transparency and donor trust. In short, being able to track expenses helps your church stay on budget, maintain financial integrity, and make informed financial decisions.

Another essential tool for making informed financial decisions is none other than... your church's budget.

Built-in Financial Reports and Budgeting

All ministries need a church budget to outline how the church will allocate its income to cover expenses over a specific period of time. This includes projected income such as tithes and offerings, as well as planned expenses such as payroll, building maintenance, or missions.

In simple terms, a church budget is like a roadmap for managing the church's money, and good accounting reports are the tools that help you see where you are on that map, ensuring you stay on track and make good financial decisions. Without a budget, it's nearly impossible to manage your church finances.

2. Reasonably Priced

With your church's budget in mind, you need a tool to manage church finances that is affordable.

Ministries shouldn't have to spend more than they're taking in just to effectively track their church finances. I see companies all the time take advantage of ministries by overcharging them by hundreds (or thousands) of dollars every year. This should be against the law! The best church accounting software shouldn't be a financial burden to your ministry.

Here's what to look for...

• A free trial to see what the software looks like before committing
• Don't fall for any "setup" or "start-up" costs before you've even used the software 
• Clearly advertised prices that are easy to understand

3. Easy-To-Use

Software should be user-friendly...especially church software...especially church Accounting software! With the help of great support and user guide articles on hand, you should be able to "hit the ground running" with minimal effort.

Here's what to look for...

• Positive reviews from actual users of the software from an independent review site
• An easy to use interface with clearly labeled buttons and in-app help
• A modern user interface (companies with an old UI means they don't update their software)

4. Includes Free Support

Unless you're a Certified Public Accountant or have extensive experience in accounting, you'll probably need help setting things up. Before looking at features or prices, make sure the company has great support.

What to look for...

• FREE support. Avoid companies that charge extra for support
• Support that doesn't take days for a reply or call back
• An active Facebook Group with users helping each other regularly
• An extensive online user guide with screenshots
• Live webinars and videos

(Bonus) Integrates with your ChMS and Online Giving

This is a huge bonus. Do yourself a favor and choose an Accounting platform that integrates with your Church Management software or current giving software. Even better, choose an all-in-one software! Having the ability for your software to communicate with each other will lead to smoother sharing of data and simplify your church accounting responsibilities.

The Best Church Accounting Software

Managing your church’s finances might seem overwhelming, but with the right tools and a supportive team, you can navigate it successfully. Remember, effective church accounting isn’t just about handling numbers-- it's about stewarding God's money effectively and honestly. We’re here to support you every step of the way.

Other Great Reads...

• How to Generate Contribution Statements 
• Contribution Statement Checklist (5 things)
• The Best Contribution Statement Software
• What Needs to be on a Contribution Statement 
• Do Churches have to provide Contribution Statements?

Matt Church Engagement