The 'Triple A Series' #6: Developing financial administration - some key ingredients

By Alan Hough | 19 March 2019

 

The issue

 

In our churches administration can be like housework – only thought about when it is not done.

 

To St Paul it was much more than that. It was:

 

  • a ‘gift’ alongside those of apostles and prophets (1 Corinthians 12);
  • an action which honours the Lord (2 Corinthians 8);
  • respect for authorities (Romans 13).

 

Every week at Stewardship we see churches with failures in financial administration, some minor but some major, which result in pain and real cost. In those cases the church is like a ‘leaky bucket’ – allowing funds to slip away like water, often with consequent reputational damage. Our greatest critics tend not to be regulators but our own supporters who expect better from us.

 

It is not the intention for churches to be ‘perfectionist’ but rather that we honour the Lord in our administration, doing this as well as we can.

 

The ingredients

 

The key ingredients in creating good administration include:

 

  • investment of time and talent (and maybe money);
  • knowing what you don’t know;
  • getting the balance right.

 

Investment

 

We now run our churches in a world full of regulations, far more now than only 20 years ago. We:

 

  • handle (often large) flows of money;
  • employ people;
  • claim Gift Aid and other charity tax exemptions;
  • operate subject to charity law, etc.

 

The regulations that apply to each area should be understood at least to the level that church members, regulators and others would expect.

 

Most problems come about because we have not thought about the regulations or, if we did, we underestimated their complexity or how they would impact us. Resolving that requires investment – of (some) leadership time, of individuals’ talents and sometimes through training and support. Thank God for the gift of administration!

 

Knowing what you don’t know

 

Regulations are always changing but ignorance is no defence. As church leaders we can’t expect to know everything, but we should have our eyes open, alert to changes which will impact our church.

 

Look out for the gift of administration and volunteers who know stuff. We can also do our own research, but it is likely nowadays that all churches will have to look outside of themselves for some help: for knowledge or services. It is part of the cost of operation.

 

Getting the balance right

 

Striking the right balance is important for churches and their finance teams. We do not want to be leaky buckets, but neither do we want to button everything down so tightly that nothing really ever happens!!

 

Plugging a leaky bucket may be as straightforward as introducing policies, procedures and practices. However, don’t underestimate the tension that this can bring into churches: delay, frustration and restriction. The key is to handle this tension well with dialogue and openness.

 

Conclusion

 

Good administration is a gifting and so much more than a simple hygiene factor in church finances. When handled well, and invested in by church leaders as well as finance teams, it is an essential part of creating a balanced financial environment of support, encouragement and control.

 

We see a number of rewards for churches operating with good financial administration:

 

  • processes are supportive and effective;
  • problems are anticipated before becoming fires to be put out;
  • Romans 13 is lived out – taxes and other payments are made on time;
  • strong reputations are built.

 

That is a good return on our investment as leaders, trustees and finance folk.


 

 

More in the 'Triple A' Series:

 

The 'Triple A' Series #1: Why is the way the church handles money important?

The 'Triple A' Series #2: What is the 'Triple A' in a church context and why is it biblical?

The 'Triple A' Series #3: What could happen if a church handles money poorly?

The 'Triple A' Series #4: How can churches develop a good attitude to money?

The 'Triple A' Series #5: Developing Financial Accountability

 

Posted by Alan Hough

Alan has an accounting background having worked in “the City” for more years than he cares to mention. He now works as an advisor and a consultant to a number of Christian churches and charities seeking to help them better understand and embrace their finances.  On a good day, you might find him on out on his bike or at White Hart Lane cheering on his beloved Spurs.

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