What makes church accounting so different? Well the main difference is fund accounting. When money is donated or given to a church, the church needs to keep track of it a bit differently than a business would. First of all, a church needs to keep track of member donations for tax purposes. In addition, churches need to keep track of the type of donations in different “funds” or accounts. For example a member may specify that a certain donation is supposed to be used for a specific purpose (this could be for a new church, for missionary purposes, or for an upcoming service project). The church accountants and leaders have to keep track of where the money will be going (to do this, they use funds).

QuickBooks For Churches

Interestingly enough many people don’t know that the most popular church accounting software is QuickBooks. Most new church accountants have heard of QuickBooks before, but they don’t know that Intuit (the makers of QuickBooks) makes a special nonprofit version that works great for churches. You can read more about it in my QuickBooks for Churches review.

Church Management Software

Some people don’t really see a difference between accounting software for churches and church management software. At first, I didn’t really see a difference either, but now that I’ve been writing about and reviewing this software for several years I see some key differences. Management software is designed to manage information about your members. For example you may want to know membership attendance for religious meetings. You’ll probably also need to track personal contact information for each of your members. Sure you could probably keep all of this information in a spreadsheet, but there is software out there that will do all of the hard work for you. Most software will allow church leaders to have a picture of the individual along with all the pertinent information all on one screen. This software can make being a church leader much more manageable.

Example of Church Management Software

Free Church Accounting Software

The old saying goes that “there is no such thing as a free lunch.” Well that’s only partially true. The truth is there are some free church accounting software packages available. However, they aren’t as sophisticated or user-friendly as the software that you can purchase. In addition, they may not have all the requirements to meet your needs.

QuickBooks has a nonprofit version. Unfortunately there site doesn’t advertise it well in my opinion. You go to the premier version and then you have to toggle an option to nonprofit. This nonprofit version has certain features that make it easier to use than QuickBooks Pro.

Can I use QuickBooks Pro for my church or nonprofit or do I need the Premier Nonprofit Version?

The answer to this question depends on your current expertise in accounting. The Premier version costs about $150 more than the pro version for a single user edition. Note that most small churches will only need a single user edition (it doesn’t mean that only one person can use it, it means that only one person can access the data at a time).

The main advantage of the nonprofit version is that it comes preprogrammed for nonprofits. This leaves a lot less room for your church clerks to make mistakes. Now, if you are already have a deep understanding of QuickBooks and you don’t mind customizing it a bit, then QuickBooks Pro may be the better option for you.

Some critics of the nonprofit version have said that the pro version simply changed “customers” to “donors” and “invoices” to “pledges.” While this is partially true there are some other advantages to the Non-Profit version.

• The Non-Profit version has a chart of accounts is preinstalled that is based on the Form 990 for nonprofits.
• The Non-Profit version comes with a sample nonprofit organization already set up and running. You can use this sample to understand how fund accounting works. This can be a real lifesaver to people who are new to fund accounting or QuickBooks.
• The Non-Profit version allows for more intuitive donation and contribution tracking
• Finally, the Non-Profit version comes ready to provide reports and letters specifically for non-profits. Remember that financial statements for nonprofits are quite different than their for-profit counterparts.

One advantage of QuickBooks over other types of church accounting software is that a lot of people are familiar with it. Even if your congregation is small, you might be surprised that someone has had at least a little experience using it. QuickBooks is fairly user friendly.

If you are looking to save your church some money note that if you follow any of the QuickBooks links on my website you will get 20% off.

QuickBooks is Customizable and Easy to Use. Save up to 20% + Free Shipping Now.

One resource that I would highly recommend for those churches that are new to QuickBooks or new to NonProfits is “Running QuickBooks in NonProfits” by Kathy Ivens. You can find the book at Amazon for around $20. This book is a great resource on using both the NonProfit and Pro version for churches.

Still have more questions about using QuickBooks for churches? Place a comment below so I can answer it and other people will benefit from reading it as well.