Be Aware of This Myth When Evaluating Church Management Software | StevePerky.com

Be Aware of This Myth When Evaluating Church Management Software

There has been passed down in the church office a criteria for church software that is no longer applicable today. Not only is it not applicable, it can be detrimental to a church's growth if it causes a church to select the wrong software solutions needed to properly fulfill its mission and ministry.

[callout]Myth:
The church management system (ChMS) and the church financial system (CFS) must be from the same company.[/callout]

History of Church Software

In the early days of church software, I would argue that the above statement was true. There were little to no standards in the software business back then, so it was important to get a comprehensive solution from one company.

Times have changed.

What Data Do They Have In Common

There are three main scenarios where the ChMS and CFS have data common.

  1. Payroll: If the church processes payroll in-house, then the basic contact information of church staff, who are also church members, would be the same. If a staff person's address or phone number changes, it can be changed in one place. This is a very small percentage of the church, so the benefit of having one place for these addresses does not provide enough benefit to validate the myth above.
  2. Accounts Payable: This is the same as payroll but for church members who may receive reimbursement checks when purchasing on behalf of the church. As above, this is generally a very small percentage of the church, so the benefit of having one place for these addresses does not provide enough benefit to validate the myth above.
  3. Contributions Information: This is the biggest reason I hear church financial administrators give for wanting a single software vendor. To understand why this is a perceived necessity, keep reading.

Understanding Contribution Data Flow

There are two fundamental pieces of data related to financial contributions.

  1. Individual, itemized contribution data that is used to produce “contributions statements.”
  2. Fund totals that need to be shown in the general ledger. For example, after all the contributions for a worship service have been counted, there may be money given to the:
    • general fund
    • benevolence fund
    • mission fund
    • building fund

The total for each of these funds needs to be reflected in the general ledger. The detail of each gift needs to be stored on an individual's record.

So the sum goes to the general ledger in the CFS, while the details stay in the ChMS.

Let's follow a Sunday morning offering. For this example ten people each gave an offering of $20 to the General Fund. The total offering was $200.

  • Each individual's contribution gets entered into the ChMS so contribution statements can easily be produced at a later date.
  • The sum total of $200 for the General Fund goes into the CFS in one of two ways.
    1. Manually entered into the CFS
      Pro: no need for special export/import knowledge
      Con: Allows opportunity for human input errors. The more funds there are, the more potential there is for date entry error.
    2. Export/Import: This allows you to export the Fund Total data from the ChMS, usually in a comma-separated value (CSV) file. That file is then imported into the CFS. This is a common practice and not difficult to do even if it is scary the first time.
      Pros: fast, no need for additional data entry, eliminates possible data entry errors, frees you to choose the best ChMS and best CFS packages to meet your needs.
      Cons: Takes a small investment of time to set up and learn the process. The length of time depends upon the combination of ChMS and CFS software solutions chosen.

Questions You Should Ask Software Companies

  • Ask if the ChMS can export to a CSV file.
  • Ask if the CFS can import a CSV file.
  • Ask each company if they already work with the other on making this process even easier.

Other Considerations

With so many regulations, industry standards, and Generally Accepted Accounting Principals (GAAP) specific to non-profits, it can take a lot of resources from a software company to ensure the quality of its financial software. From ongoing development to ongoing support to maintaining GAAP standards, it can be easy for a software company who specializes in both ChMS and CFS to focus more on the CFS while its ChMS  does not get the development and support you as the customer expect. While software companies do their best to not let this happen, due to the nature of church financials, they will err on making sure the CFS is the best it can be.

Conclusions

You are free to choose the best ChMS for your church and the best CFS for your church.

The goal of this article is not to steer you toward or away from any specific software solution. The goal is to provide an accurate picture of the relationship between Church Management Systems (ChMS) and Church Financial Systems (CFS) so you can select the best combination for your church or ministry.

Question

What criteria are important for your church in selecting ChMS and/or CFS?

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About the Author

Steve's passion is to help ministers and churches do ministry in our new digital, social, mobile world at the speed of life through building a strong ministry infrastructure (minfrasTructure). With a background in church administration, Christian education, missions, and technology, he offers advice, tips, and tools through writing, blogging, speaking, online courses, consulting, and personal coaching.

  • Tony says:

    Nicely stated, Steve. I hear that same question all the time, and my answer matches your, but I’ve never bothered to document it. Well done! Now, the natural follow-up: do you have a good list of the viable CFS vendors? Bonus question: and any references of churches that have been successful and satisfied with the split?

    Thanks,

    • Steve Perky says:

      Thanks, Tony. As for CFS vendors, as you know we used to be limited to companies who specialize only in church software. These days, however, there are more financial software vendors who also know church accounting needs very well.

      At the church where I am on staff, we are implementing Intacct (http://us.intacct.com/church-accounting-software). It is very powerful and we are getting good feedback from our staff.

      I know of some other churches using QuickBooks for churches (http://quickbooks.intuit.com/church-accounting/). While it is less expensive than Intacct, it does not provide all the tools and ease of use that Intacct does.

      I also know of a few larger churches using Great Plains, which is now a part of the Microsoft Dynamics platform. (http://www.microsoft.com/en-us/dynamics/erp-gp-overview.aspx).

      I would also recommend churches look at some of the current ChMS companies and the CFS they have to offer. Some have really strong financials even if their ChMS may not meet the needs of the church. So while may look odd, it is possible to have CFS from one church software company and ChMS from another.

      The key is for churches to have an open mind and look outside the “packaged” software bundles as they are presented on sales material.

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