Ideally, a church will have an annual budget and will monitor the actual monthly income and expenses compared to the budget to make sure they are on track. This allows the church to know if it needs to cut back on expenses if there is a shortfall in income, or perhaps allow them to pursue additional ministry opportunities if income is exceeding the budget. Either way, this knowledge allows the church to make informed decisions in a timely manner.
Even if you don’t have a budget, this is still a good time of year to thoroughly review the church finances. Has more money come in than gone out? How do the various income and expense accounts this year compare to the same time period last year? If there are any significant unexplained differences, additional research may be needed.
If the church has a loan and needs to meet certain financial ratios, now is a good time to review if the church is on target to meet the loan requirements for this year. Waiting until December or January is too late to fix any shortfall. However, by reviewing now, you will have time to make any adjustments needed to avoid defaulting on the terms of the loan.
Finally, this is also a good time of year to begin working on next year’s budgets. This allows you time to complete them before the hectic year-end events and holidays.