5 Months Before the New Fiscal Year – Cast Vision to Ministry and Operational Leaders
- Schedule meetings with each ministry leader to cast the vision for their goals & objectives for the upcoming fiscal year. Remember, the budget is a tool to support the church’s mission, vision, and values.
- Allow time for leaders to dream about how to effectively use the financial resources to accomplish their goals & objectives. A zero-based budget allows each ministry to start with a blank slate from which they can begin.
- Foster collaborative communication where expense overlap occurs. Silos, or protecting “territory” in the church, is not healthy. For example, if the adult ministries and the hospitality team need coffee, collaborating on this line item could cut costs and waste.
- Provide ministry leaders with a 6-month history of expenses to plan for ongoing ministry expenses. Even when using a zero-based budget, having a history of costs helps spark ideas and serves as a guide.
4 Months Before the New Fiscal Year – Determine the Budget Target
- At this stage of the process, the financial team establishes the overall budget target. To learn more about creating a church budget target, read, Creating A Church Budget Target.
- Ministry and operational leaders continue to work on their budgets based on their established and agreed-upon goals for the upcoming fiscal year.
3 Months Before the New Fiscal Year – Compare Budgets to the Target
- With the budget target complete, the financial team sends the budget target for approval. Because of the multitude of structures in churches, approval processes vary. The goal is to prevent anyone from operating in a vacuum or having too much influence. Accountability, transparency, and collaboration are essential at this juncture of the process.
- Begin compiling the individual ministry and operational budgets into a centralized budget to compare them to the approved target.
- Determine the necessary adjustments to the budget and reset expectations. That short sentence is loaded. For the most part, the dreams and goals of every ministry should exceed that of the budget, or they are not dreaming big enough. The mission, vision, and values that shaped the upcoming fiscal year will also decide what to postpone. Remember, you cannot hold a team or leaders accountable for achieving a defunded goal.
- Ministry and operational leaders revise the budgets based on the outcome of the agreed-upon adjustments.
2 Months Before the New Fiscal Year – Refine and Finalize
- With the heavy lifting complete, it is time to compile the revised budgets in the master budget and make any final adjustments.
- Provide a budget summary to the approving authorities in your church for final approval.
1 Month Before the New Fiscal Year – Distribute the Budget
- Congratulations, the budget for the upcoming fiscal year is ready. At this stage of the process, it is time to provide ministry and operational leaders with the final budget for their specific area. The leaders will use this copy to track their progress throughout the upcoming year.
- With the budget complete, I highly recommend providing a summary for the congregation to review.
- The final step is to enter the budget into the accounting software.
Creating a church budget cannot be slapped together in a weekend. It takes time to cast a vision, determine budget amounts, refine the outcomes, and communicate effectively. But, the results are worth it, like baking the perfect chocolate chip cookie that’s not too hard and not too chewy.