Welcome to the Church Accounting Software Guide. In order to better serve you, I’ve decided to start letting you email me directly with your questions about what type of software will work best for your church or non-profit organization. For those of you who are new to this whole idea of church or non-profit accounting and are feeling a bit overwhelmed, feel free to email me as well. I can provide you with some resources to get you started.

It’s pretty simple. You email me information about your church (see below for more details on what information you should include) and I email you back with the software package(s) that will be the best fit for your church or non-profit.

For first time visitors to this site, I suppose I should explain who I am so you realize you are getting informed advice. My name is Nate Waddoups and I have a Bachelors and a Masters degree in Accountancy from a religious school (which also happens to be ranked in the top 5 best accounting schools). In addition to my training in school I’ve spent three years working directly in the church finance trenches—of course my church would ask me to manage the finances because of the accounting degree.  I’ve done hours and hours of research and experimenting with the different church accounting or management packages available. The truth is most of the software packages available are pretty good, but they all have different features and depending on what your needs are you may or may not need all of these features.

For those of you who want some help, send me an email at churchaccountant@gmail.com and give me some basic information about your church. I’ll get back to you with my recommendations within 24 hours (unless it’s a weekend).

Below are some items you might want to share in your email.

Number of Members in Your Church:

Number of People Managing your Church’s Finances:

Experience of People Managing your Church’s Finances: Do they understand basic accounting principles? Do they know anything about accounting for non-profits?

Does your church already have an accounting system in place? If so, which one?

Are you looking for software to manage membership? Or do you just want a church financial software package to manage contributions?

Feel free to send me any other information you think will be helpful.

Always remember that church donations are sacred and should be managed carefully. In addition you’ll need to be in conformance with IRS section 501(c)(3) to be tax-exempt. The right church accounting programs will help you be in compliance. Note that software does not take the place of a licensed tax CPA or lawyer.

The Good

Experience. This group has been doing accounting software for churches for a long time, since 1987. That is before the Internet was even being used on a mass-level. This means that their product has had the time necessary to work out any quirks that so often come with new software. It also means that a lot of people know how to use it and there will be good forums and self-help guides available.

Another great thing about Church Windows is that it comes as a complete package or as individual modules. Buying individual modules can be extremely difficult if you don’t know what you’re doing. A lot of church accountants have no idea what it is they need for their accounting system. For these people it is nice to buy a complete package and know they are getting everything they will need.

On the other hand it is nice for those people who are only looking for a specific feature such as membership tracking, payroll, or accounting to be able to just buy the individual module they need. These people can save a lot of money and confusion by not going with the whole package.

Pricing: This is probably not Church Window’s greatest strength, but it is a strength nonetheless. Depending on exactly what you need, you might be able to find a cheaper option. However, usually when you pay a little more, you get a little better quality. Overall this software is priced very competitively.

Classes: Church windows is a pretty intuitive program; however, to get its full use you may want to take some of the classes they offer online. The fact that they even offer these classes is a huge bonus. A lot of people end up buying expensive accounting software for their church and end up not really knowing how to use it.

The Not So Good

I should probably qualify this with the fact that I’m easily bothered by website checkout processes. A lot of the time I wondering what products I’m getting and at what price. I’m also often left wondering what I’ll be paying for shipping. Some people say that if you have questions you should call them; well, I for one don’t want to call them. If I wanted to chat with someone then I wouldn’t be shopping for the church accounting software on the Internet.

With that introduction, I must admit I was confused by the Church Windows check-out process. Take a look at it below.

Church Windows

I’m not sure how much you can see from this picture, but let me explain why it bothered me. First of all at the top it says “Standard Integrated Packages” $695. At this point, I’m wondering what I’m getting for the $700. After thinking about it a while, it looks like I’m getting the membership and contribution software, but that wasn’t readily apparent to me.

Now, at the bottom of the picture you will notice they are offering additional options. These always make me nervous because I have no idea if I need this stuff. This one made me especially nervous because it has Accounts Receivable (add $150). At this point I’m thinking, “Wait a minute, isn’t accounts receivable part of Accounting?”. Then I really start wondering what comes in the accounting package. Is it missing something else that I might really need?

One thing that rubbed me a little the wrong with with Church Windows was the fact that they make you pay for the online classes. I realize that customer support isn’t cheap, but a lot of companies these days will offer free pre-recorded classes for people who buy their products.

Church Windows also charges what is called a support fee. This is pretty standard amongst software providers, but it is something you should really know about before purchasing your church accounting software. Basically you have to pay $100-400 a year in order to get all of the latest updates and be able to call them when you have questions. Again, I realize that customer service isn’t cheap, but some customers may be annoyed having to pay $400 a year just to keep the software working correctly.

In review, Church Windows is a reliable software that has been around for quite a while. Like most quality products, they have lots of customer support. They also have a great option that will allow you to buy one module or a complete package. Their check-out process is a tad confusing and they will try to hit you up with customer service fees (gotta stay in business somehow). Overall a product that you can’t go wrong with, if you have the money.

QuickBooks has multiple versions of accounting software. They don’t have any software that is specifically named “Church accounting software.” They do however have a QuickBooks Nonprofit Edition. This version would probably be the best to use for your church’s accounting system, although some churches get away with using normal QuickBooks, known as QuickBooks Pro.

Advantages of Your Church Using QuickBooks

The number one advantage of using QuickBooks NonProfit for your church’s accounting is its ease of use. Many people, even those without much of an accounting background, are able to use QuickBooks effectively. A learning curve does exist, but it isn’t as large a curve as trying to learn a specialized church accounting software system.

Another advantage of using QuickBooks is its customer support. When we mention customer support, we are not necessarily talking about the people at Intuit who designed the software (although they are probably excellent). Chances are you know someone who is already quite familiar with QuickBooks. Imploring them to help you set up and run QuickBooks as your church accounting software might be the best route for your church.

Disadvantages of QuickBooks

**Update** It appears that Intuit has fixed the audit trail problem mentioned below and it is no longer a disadvantage for nonprofits. Several users have even claimed QuickBooks audit trail is among the best: see comment section for further discussion. ***

QuickBooks doesn’t leave much of an audit trail in some situations. If an error is made you can easily reverse what has been done without leaving a trail. For example, let’s say your church accountant accidentally books a donation to the tithing fund instead of the missionary fund. He or she can delete the entry to the tithing fund and switch it to the missionary fund without any sort of documentation.

You may be thinking that being able to easily correct errors is something you want in your church accounting system. The downside of this is that it can be easily manipulated. Most church accounting software requires an adjusting entry when an error is made. This leaves what is called an audit trail so that a church auditor, loan officer, or banker can look back and see any adjustments made throughout the year.

QuickBooks even allows you to change entries made years ago without any documentation or support. A skilled church accountant could easily cook your church accounting books using this software. However, having proper internal controls in place can help limit some of the risk of using QuickBooks as church accounting software.

One disadvantage of using QuickBooks Professional instead of QuickBooks Non-Profit is that it was originally designed for businesses, not churches. Intuit’s non-profit software will make it easy to support your church’s reporting requirements, but QuickBooks Pro. may not support your church’s reporting requirements or terminology. This is especially true if they are not similar to a normal business’s reporting requirements and terminology.

In Review:
• QuickBooks can be used for your church’s accounting
• Advantages include ease of use and great customer support ( a lot of people know how to use this software)
• Disadvantages include it doesn’t leave an audit trail which could jeopardize the trustworthiness of your church accounting system and it may not support your church’s accounting language

Back to the Basics

Before accounting became all about following rules and regulations, accounting was used to track key information. This information could be about anything. A farmer may have used accounting to track how much milk his cows were producing. A banker to track the money going in and out. An army general to track casualties. This was accounting in its most beautiful form. So useful, and so uncomplicated. Unfortunately in order to achieve comparability amongst different companies, accounting has become tainted. The numbers have to be squeezed so that they are in accordance with certain standards. They become useless, and this is when accounting becomes GAAP .

Church accountants would do well to remember that the main reason they are doing accounting is to track the useful information of their church. The good news is that you, the church accountant, get to decide what is useful. It may be church attendance, church donations, number of conversions, etc..

Fund Accounting

Churches require fund accounting. To understand fund accounting, it is helpful to understand what the word “fund” means. Fund = a reserve of money set aside for some purpose. Fund does not mean a separate bank account. In fact you can have one bank account with an unlimited amount of funds.

Why do Churches Require Fund Accounting?

When you give your money to Wal-Mart in exchange for goods you have no say over what Wal-Mart does with that money. However, when you give your money to a Church, you can tell them that your money should go towards missionary work, feeding the homeless, or building new churches. In fact, most churches have a missionary fund, a service fund, and a construction fund.

The Need for Church Accounting Software

Once you understand that Wal-Mart’s accounting is different than a Church’s you realize that special software is needed for church accounting. Church accounting software should make fund accounting simple and easy.

First of all, you might note a few good things right from the get go: (1)the website is an http(s) (that “S” is important and means that the company spent the money to be more secure–a good sign (2) they are secured by Geotrust and (3) the website is professional and easy to navigate. If you see these three things on any online website, it is extremely unlikely that you will be scammed.

Next, Clarity offers free church accounting software for 30 days (a demo version). This is a sign that they are confident in their church accounting software. This is the exact opposite of those “miracle weight loss pages” that are 100 pages long, and keep saying that they will tell you the secret to weight loss once you get to the bottom of the page (in the meantime you have to read all their propaganda, usually in the form of success stories). I’m sorry if I’m getting on a tangent here, but I can’t stress this enough, please avoid sites that are all propaganda and offer quick and easy solutions.

Clarity’s 30-day free church accounting software trial is better than most because they don’t require a credit card number before you can use the trial. Many companies give you a free trial, but ask for your credit card number in hopes that you will forget. Once your trial time is up, they start charging you (very annoying).

Functionality

The Good: Keep in mind we were using the demo version as we tested their online software. The software has all the financial accounting information any church would need. The software is very intuitive. When you tell the software to do something, it does! The layout and reports are very aesthetically pleasing.

The Questionable: When I clicked on the graphical reports, it kept sending me to some random web page that hand nothing to do with Clarity Accounting (a little frustrating, but again, maybe this is the demo version).

Keep in mind that this is online church accounting software which comes with the benefits of being able to use it anywhere, but also the security issues that come with online software.

We advise that you do some of your own research before making any purchase of church accounting software but Clarity Accounting appears to be a good product for a low price of $10 a month.

Feel free to sound off on any Church Accounting Products in the comment box.

Church Management Systems Versus Church Accounting Software

It turns out that some software exists that does just about everything for your church. These software packages are usually entitled “Church Management Software.” These management softwares take care of membership issues (attendance, converts, etc.). They also manage the finances at your church (offerings, taxes, etc.). We’ve even seen some church management software that has features that track upcoming events in your church–choir rehearsals, dinners, and church services.

On the other hand we have seen websites that sell their wares separately. For example they sell what they call a “People Suite” that will keep track of membership or a “Financial Suite” that keeps track of finances. It is important to note that these companies are selling them separately: if you buy the people suite you aren’t getting any financial suite products. This can be compared to buying Microsoft Word separate from Microsoft Excel. They don’t exactly do the same thing.

So our word of caution is to make sure that what your buying performs all of the functions you want it to. We tend to lean towards the One-Package-Does-it-all solutions, but we can see some reasons for buying separately (perhaps better functionality).

Before you make your purchase, make sure to double, nay triple check to verify that your computer(s) meet at least the minimum requirements for the software. There is nothing worse than spending money on software, returning back to your computer, placing the CD in the computer, and then finding out that your computer can’t handle the software. Please make sure you meet the minimum requirements for any software you buy for your church.

Unfortunately many companies that offer church software fail to place the minimum requirements on their websites. If you find yourself in this situation, then you have three options: (1) Gamble and purchase the software anyway hoping that your computers will have what it takes–not recommended (2) Contact the company via phone or email (3) Go to a different website. Gambling is never recommended

After searching the Internet, we’ve found that most church accounting software requires at least 64-256mb of ram. This may not seem like a lot to some people, but many churches don’t have a big budget to buy top end computers.

We hope we have saved you some time in your quest to purchase church software. Feel free to leave any comments about information you may have acquired.

Because money is sometimes a sensitive area within the Church, it is important to assure that your members’ donations are being accounted for. Church accounting software can help you keep better track of where these donations are going.

You can use church accounting software to give annual or semi-annual statements to your members. Giving these statements increases trust with your members and can lead to further donations. You can also use your church management software to track your expenditures. Most software systems will display this information in a way that will allow you to make better decisions…

Decision making is critical when spending members’ contributions!

1. Internet Security Issues

A hacker could maliciously enter your online database that contains all of your important church management information and steal or delete the information. We won’t get into the technical jargon of how they might accomplish this, just know that they can.

2. Your Online Software Company Goes Out of Business

If you have your information stored online through one of the many online software systems, then you run the risk of your online software provider going out of business and trashing your data.

We’re not saying we’re completely against having all of your church management data online, but we recommend caution when this information is online. Always have a physical backup of your church accounting software data.

As with most products, if you spend a little more it is because the product is a little better. The trick is finding out what your church’s needs are. You might ask yourself, “What is it that I need to track?” You may be wanting to track your membership from week to week, or how much offerings are given on a monthly or yearly basis. More complex questions might be, how much taxes have I withheld for the paid clergy or how much will I need to withhold? The bottom line is to find out what exactly you need the software for before buying it.

Many church accounting services provided by companies will want to charge you on a monthly basis. This is becoming more common in almost all businesses. Prices start around $30 a month and go as high as $200 a month. We wouldn’t recommend paying more than that for your church accounting software. If you dislike monthly fees, then you can buy quickbooks online for about $200 over at Microsoft.

The best of luck in your hunt for your church management software. If you have any additional pricing information, feel free to post it in the comments box below.