First of all, Balance Sheet is just the generic term I use for the financial report that tells you what the church owns (Assets), what the church owes (Liabilities), and what restrictions exist (Equity or Net Assets). I’ve seen this called the Statement of Financial Position or Treasurer’s Report quite often.
Second of all, you are in the majority if it doesn’t make sense to you. I’ve been an accounting professor for two months now. Accountants and financial people are just wired differently. They can look at a page of numbers and effortlessly understand it.
If finances and accounting come easy to you, you are in the minority. Be patient with those that are struggling. Don’t look down on them. Instead, do your best to make sure you are helping them to understand…at least the important numbers.
In the video, I give you a quick overview of a typical church Balance Sheet from QuickBooks. Hopefully it’s a help. After you watch the video, here’s some questions.
- Are all the Assets & Liabilities we need to track on the Balance Sheet? – Are investment accounts are loans missing?
- How is our money invested? – Not only where is it invested, but how is it invested? Is long-term money invested for long-term results?
- How often are Investments and Debt balances updated? – Sometimes these can get forgotten and stay the same for the whole year. It’s motivating to see debt go down. It’s insightful to see investments going up and down. The unknown often brings fear.
- How can I tell how much is unrestricted? – There should be some system for showing how much money is unrestricted and how much is donor restricted. You should never cashflow with donor restricted dollars.
In the video, I give you an overview of my template which is linked below.
- Balance Sheet Template: https://jctaccounting.com/wp-content/uploads/2022/10/balance_sheet.xlsx
- QuickBooks Chart of Accounts Template: https://jctaccounting.com/wp-content/uploads/2022/10/quickbooks_online_coa_sample_file.xls
- Dakotas Methodist Foundation. https://www.dakotasumf.org
- DWU: https://www.dwu.edu/