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Pastors and church leaders tend to wear many hats. While they may serve at the pulpit in the morning, they often pivot to become the youth group leader, outreach coordinator, and church accountant by the afternoon. Though many congregations rely on volunteers and part-time admin staff, using free software can help streamline processes, like many accounting tasks.
In this post, take a look at the benefits of incorporating free church accounting software into your house of worship, along with some essential features and the top free options for churches and nonprofit organizations.
Churches are a place for people to grow their faith, not their finances. As such, it can be difficult for some congregation and religious nonprofit leaders to feel comfortable discussing accounting, even when the topic involves financial reporting, donation tracking, and budgeting efforts for the church.
However, it’s no secret that many elements of the church—like missionary work and regular event programming for members—require the congregation to keep the accounting running smoothly. Consider these benefits of simplifying accounting efforts with free church accounting software.
There’s no way to understand exactly how much money is entering and exiting the church without proper tracking. Accounting software empowers congregations with a view of daily expenditures, such as event costs, which allows church leaders to implement spending limits to remain on budget.
Church accounting software also consolidates various income sources—including recurring tithes, event proceeds, and fundraiser donations—giving church leaders a single view of current progress. The right software improves general accounting accuracy to help further the church’s mission.
It can be a challenge to complete accounting practices in a timely manner when the church finances are scattered across a combination of digital spreadsheets and physical receipts. Accounting software works to gather the numerous components of a church’s finances, from payroll to planned giving, in one place. It helps make timely financial information readily available to stakeholders.
Church accounting software dramatically simplifies financial reporting for churches and religious nonprofits. While 501(c)(3) nonprofit churches and other faith-based nonprofits are tax-exempt, they still must file annual financial reports by law, which accounting software can quickly populate.
Similarly, though certain churches are tax-exempt, the Internal Revenue Service (IRS) still expects them to submit federal payroll taxes for paid employees.
Most churches navigate three kinds of payroll tax: income taxes withheld from employees’ wages, the employee’s share of Social Security and Medicare taxes withheld from employees’ wages, and the employer’s share of these taxes. Accounting software quickly collects and organizes this data.
A well-managed budget is vital to scaling a congregation and succeeding with a church’s mission. Free church accounting software provides a bird’s eye view of the congregation’s finances, serving as a guide to remain within spending limits, achieve fundraising targets, and remain fiscally secure.
Church donations take several forms, including event fees, fundraisers, tithes, and more. These gifts must be properly tracked and reported, not only to maintain accurate bookkeeping for the church but also to communicate the current progress of church initiatives directly to donors and members.
Free church accounting software tracks all gifts and donations made to the church, no matter if they’re given in physical cash or check or digital payment methods. This software can then generate stewardship reports to provide congregants with the status of their individual donations.
Speaking of the status of individual donations, church donation software also adds a welcomed layer of transparency to church finances. Accounting software allows churches to demonstrate that monetary gifts were used as the donors intended, whether that be serving the local community or completing missionary work. Plus, it deploys proper tracking to ensure compliance with tax laws.
When financial data is spread across multiple systems, it leaves the church open to potential risks, especially fraud. A reliable free church accounting software is designed with layers of protection to safeguard both the church’s finances as well as the sensitive financial information of its congregants. It wards against duplicate data entry, administrative errors, and serves as a method of data backup.
For-profit companies, like retailers and manufacturers, often encounter separate tracking and reporting needs than churches and religious nonprofits, making church accounting software a must for proper financial security. Here are the top five free church accounting software to consider.
Zoho Books is a free and low-cost accounting software that lives under the Zoho suite of software solutions. It’s by far one of the most popular free accounting platforms, not just for churches, but for tons of small businesses that prefer its simple online payments and haul of helpful integrations.
For instance, Zoho Books collects payments online through one of many hassle-free payment gateway integrations. Once money enters the organization, users can easily reconcile their books by manually importing bank statements, instantly categorizing transactions, and matching them in Zoho Books. There are even scheduled reports to share financial progress with the congregation.
Cons
Zoho Books offers a free plan for organizations with less than $50,000 in annual revenue, which can accommodate one user and one accountant. This version includes the customer portal for donors and online/offline capabilities for expense tracking. To unlock additional features and more users, opt for the $15 per month Standard plan or $40 per month Professional Plan.
Wave Accounting is another ultra-popular free accounting software. As a cloud-based software, Wave allows church leaders to access their accounts from any device and invite unlimited collaborators, as well as view bookkeeping details for multiple congregations from a single login.
For church leaders with multiple houses of worship or international congregations, Wave also manages various international currencies and accepts and processes credit card transactions from anywhere around the globe. Accounting features span across payment processing, payroll, and even receipt scanning, with an option to hire an expert Wave Advisor that’s priced for small businesses.
Invoicing and accounting features are completely free for unlimited users on Wave Accounting. Additional features, like mobile receipts and payroll, are charged at $8 per month and $40 per month plus $6 per employee/independent contractor paid, respectively.
ZipBooks is the free accounting software best suited for church leaders who already work with accountants, but need to clean up their congregation’s daily finances. ZipBooks was designed to help share financial information safely and securely, with simple reports to streamline tax information for employees, prepare end-of-year filings, and even share cash flow with an accountant for advice.
Beyond compatibility with third-party accountants, ZipBooks has also been designed to eliminate manual data entry, saving time on repetitive bookkeeping tasks. The accounting software places transactions into smart categories and organizes all entries in a customizable Chart of Accounts.
The ZipBooks Starter plan is completely free to manage unlimited invoices and customers, accept payments on Square or PayPal, and view basic reports. A $15 per month Smarter plan allows for templatized invoices, and a $35 per month Sophisticated plan features smart tagging on expenses.
Congregations with multiple stakeholders may prefer the cross-platform desktop functionality of Manager.io. Available for download on Windows, Mac OS X, and Linux, the database format on Manager is universal across all operating systems, meaning accounting files and financial reports created on Mac can then be easily transferred to Windows or Linux, or vice versa.
Manager also comes equipped with a few flexible features that churches and religious nonprofits may prefer. For instance, there’s a Tax Codes section in which churches can add, view, and manage the tax codes relevant to religious organizations, and a Custom Fields screen to add more details.
Manager.io is 100% free. Users can access all program features with no time or usage limits—and without any ads to interrupt the accounting process—at no cost.
For simplistic free church accounting software that gets the job done, look no further than Express Accounts Accounting Software by NCH Solutions. Often categorized among the most easy-to-use accounting programs for desktop, Express Accounts features an intuitive dashboard and menu, along with a user-friendly UI that empowers church leaders to quickly navigate between tasks.
Express Accounts users can generate over 20 essential financial reports in minutes, including bookkeeping for payroll and tax season. Plus, Express Accounts integrates seamlessly with the other software solutions under the NCH umbrella, allowing users to craft their ultimate technology stack.
There is a free version of Express Accounts Accounting Software that’s been designed for use by small businesses which does not expire but does have limited functionality. To access features designed for larger organizations, such as multiple currencies, users will need to update to a paid plan. Paid Express Account Accounting Software packages start at $5.50 per month, billed quarterly.
Managing congregants' finances, such as tithes, gifts, or donations, is a significant responsibility for church leaders. Fortunately, free church accounting software can greatly simplify this process since it streamlines the management of your congregation's finances and makes annual bookkeeping more efficient.
One key piece of this puzzle is donation tracking and platforms like Subsplash Giving are designed to facilitate this. They offer a convenient way for members to contribute financially from anywhere, at any time, plus added benefits like:
[.blog-contact-cta]Schedule your free Subsplash Giving demo today[.blog-contact-cta] and find out how much time and money your church can save!
