Today, we’re looking at the venerable Monthly Income/Expense Statement as the 1st report as part of the Reporting Strategy Series for the Executive Team.

Generally, the Executive Team gets the same detailed version the Finance Team is reviewing however, the SP could opt for summary reports if elected to rely on his XP or CBA to alert him as needed.

At the bottom of this post is a link to download the pdf format which is the subject of this post. Take a look – you could review and modify yours to fit your overall reporting strategy.

Why you need this report for your Church Executive and Finance Teams:

a) it provides a tool to look at income/expense trends for the current year

b) it compares the current year to date to the prior year. (a common historical marker is the same time year ago)

c) it segregates income and expenses within two primary Activities – Ministry and Expansion (as in construction, fundraising, debt)

d) it tracks expenses by Type (Admin, Facilities, Ministries, etc), Dept and Line Item

e) lastly, it expresses if the church is generating a positive or negative MARGIN – within each Activity and in Total

Understanding these components allows church leadership to speak about trends and changes from the prior year, and as part of what’s required in making informed decisions. An informed Pastor knowledgeable about his church finances breeds trust. Even more so when proper actions take place as needed.

From an accounting perspective:

1. It provides a means to make certain adjustments prior to publication. For example, reviewing the report for omissions or spikes by month provides a chance to accrue something if needed or shift something to Prepaid Expenses if appropriate.

2. It lends itself to understanding changes from the prior year for use in analysis

 

Here’s the Report Format. [download id=”993″]

What have you seen? Scroll down and leave a comment or question.

In my next post in the series, we look at the Balance Sheet.