Financial Principles

  • Practising good stewardship is a Biblical responsibility to God and to our donors who give sacrificially.

  • Well-managed finances can have a huge impact on the effectiveness of your ministry.

  • Finance is one of the high-risk areas where mismanagement or improper conduct can destroy a church’s reputation and ministry.


Key Considerations

  • Treasurer and Operations Manager are key roles and should be selected carefully.

  • Systems and software should be carefully considered at set-up as they’re hard to change.

  • Clear and robust processes and sign-off and approval levels are essential to prevent mismanagement or fraud.

  • Investing time in a well thought-through budget will pay dividends.

  • Keeping a keen eye on cash flow at all times is key to avoiding future cash-crunches.


Treasurer and Operations Manager

The roles of Treasurer and Operations Manager are key in ensuring robust and well-managed finances. The Treasurer should have a good understanding and experience of finance and general accounting principles (eg Balance Sheet, Income Statement, Cash Flow Forecast, Depreciation, Budget, Specified Funds, etc.) as well as being fully supportive of the vision of the church and should have a good working relationship with both the Vicar and the Operations Manager. The Operations Manager should have a good understanding of general accounting principles and financial processes and should be able to understand and work well with Excel spreadsheets.


Using a simple, intuitive, low-cost, cloud-based software is the best choice. We recommend using Xero accounting software as a first choice or something similar (eg Quickbooks). Transactions can be input by someone in the church (eg administrator, finance assistant), with monthly management accounts and annual accounts being put together remotely by an accountant. You could find someone local but we recommend using Jacquie Driver and Derek Rodwell who provide this service specifically to churches. Jacquie is Chief Operating Officer at St John at Hackney and both Jacquie and Derek have many years of experience doing church accounts and offer a very competitive rate. If engaging them to do your accounts they will help you get set up on Xero and they can be contacted at:



For payroll services we recommend using Stewardship who can act as a payroll provider and will take care of the monthly payroll and associated administration for a small monthly fee, depending on the number of employees.


If needing to set up a bank account then be aware that this can take several weeks if not months from start to finish and banks have very onerous due diligence and regulatory checks these days.

We would recommend going for a large commercial bank that has a good online system / app and which has a branch in close proximity for convenience for cash deposits etc.

You could also use CAF bank that has a more ethical/Christian approach.

It may be worth setting up two separate current accounts: one for donations and one for income if you are expecting significant amounts of each as that will make it simpler to keep these separate, to identify and reconcile and to help prevent misallocation.  

It will be good to have all signatories with appropriate approval limits set up from the start to prevent these needing to be added later when needed.


Established Processes

Clear processes should be put in place for:

  • Cash counting and deposit (a safe will be needed).

  • Staff expenses reimbursement (via a signed paper / online form).

  • Invoice payments (via a signed paper / online payment request form).

The guiding principles are that:

  • At least two people should always sign off every deposit, expense or payment.

  • The invoice/expense submitter should be different from the approver.

  • Payments need to be approved at the appropriate level according to the size of the payment (eg >£5k the Vicar, >£10k the Treasurer, etc.).

Budgeting Priority

It is worth putting time and effort into the budget setting process which should take the following into account:

  • Vision, mission and strategy for following year.

  • Forecasted or hoped-for income levels.

  • Forecasted cost for each ministry area.

The budget will need to be agreed by the Treasurer and PCC so once set then it’s important that agreed budget levels are adhered to and any expected over-expenditure is pre-agreed by the PCC.

If the budget is broken down into each of its component parts (eg ministry area/project) and appropriate codes are used when invoice payment requests are raised then expenditure against budget can be tracked on a monthly basis in the management accounts which will show you whether you’re over-/under- budget each month for each area.

Budget Template Example

Please note that the budget template provides a basis on which to work but will need to be properly populated and adapted according to your particular circumstances. It is not a complete template but can easily be completed using the same logic.


Cash Flow

It’s critical to always keep a live and updated cash flow forecast:

  • Update and monitor at least monthly.

  • Include projected incomings and outgoings for the year ahead.

  • Update with what’s actually come in and gone out.

  • Review for periods where cash is low and plan accordingly.

  • Always keep a healthy buffer in case of unexpected costs.

  • Maintain an agreed Reserves Policy (e.g. 3 months operational costs).

Cash Flow Template Example