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Crucible

Crucible. Financial Management, Part 1. The Balance Sheet (Page 34). A basic statement of “Net Worth” Net Worth = Total Assets-Total Liabilities Bankruptcy is defined as an entity possessing a negative Net Worth. The Balance Sheet. What is an “Asset”? The issue of depreciation

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Crucible

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  1. Crucible Financial Management, Part 1

  2. The Balance Sheet (Page 34) • A basic statement of “Net Worth” • Net Worth = Total Assets-Total Liabilities • Bankruptcy is defined as an entity possessing a negative Net Worth

  3. The Balance Sheet • What is an “Asset”? • The issue of depreciation • For profit business as opposed to NPO’s • How to Value Assets • Book Value, Market Value or Replacement Value

  4. The Balance Sheet • What is a “Liability”? • Short and Long Term Liabilities • “Liquidity” Can I meet the payroll? • A Balance Sheet is a Snap-shot • It is useful in and of itself, but much more powerful in comparison over time.

  5. The Income Statement (Page 36) • A basic statement of “sustainability” • The “Top Side” or Revenues • The “pledge” vs. the “plate” • The “Bottom Side” or Expenses • Can be categorized in a multitude of ways to fit your needs.

  6. The Income Statement • Control of the Budget • Current month Actual vs. Budget • Variances and reporting thresholds • Year-to-Date Actual vs. Budget • Intra-year adjustments • Departmental designated funds • Emergencies • The Year-End Sweep

  7. The Cash Flow Statement (Pages 37-8) • Annual timing of receipts and expenses • Do receipts flow evenly through the year? • The timing of expenses • Sources of Cash • Weekly Giving • Designated Funds and Internal Accounts • A Bank Operating Line of Credit • A Church Foundation

  8. Internal Procedures and Policies • Separation of Powers • General business spending authority • Expense approval & necessary signatures • Departmental Spending • Budget by line item—not an aggregate • Check requests and PO’s • Credit Cards • Limits, Documentation & the Run Sheet

  9. Internal Procedures and Policies • How many checking accounts? • Internally partitioned (Designated) accounts • Access only through the Executive Minister • Battling the “Shadow Budget” • Deposits to Departments—”What do I do with this check for the youth mission trip?”

  10. Internal Procedures and Policies • The role of the Finance Committee • Intentional structuring of “tiers” of internal and external oversight • The external audit: two questions • Is the money all there • Do we have the proper procedures and controls in place

  11. Internal Procedures and Policies • Handling the Weekly Offering • Rotating teams of counters • Trained to count “colored paper” • Making the “Bank Run” • Always a team with a varied route and routine • Remote Deposit for the checks

  12. EFT (Electronic Giving) • Offers one HUGE benefit to the ministry! • ACH—Automated Clearing House ( 3.8%) • Low cost to the Church ($.20 per transaction) • Annual signup / Provision of a voided check • Automatic withdrawal on a monthly (or bi-monthly) basis

  13. EFT (Electronic Giving) • Offers one HUGE benefit to the ministry! • Credit Card Giving (14.4%) • A higher cost to the Church (3.25-3.5% of the transaction) • Annual signup / Account information • Hacked Accounts and Canceled Cards

  14. EFT (Electronic Giving) • Other Alternatives… • Giving “Kiosks” • Online Giving • PayPal, Secure Website, Dedicated Software • One significant challenge • An empty offering plate…

  15. Table Time • Are your financial records structured to give you the information you need? • Are the reports clear and consistent • Do you have a clear set of procedures in place for control and oversight of your ministry’s finances? • How can your ministry employ an annual audit? • How can methods of EFT be put to use in your setting?

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