By Patrick Henry, Treasurer/Chief Financial Officer, Arkansas Baptist State Convention
As we approach the end of the year, most of us are in “finish-up mode.” We are wrapping up projects, preparing for Christmas services, and doing our best to squeeze in everything that still needs attention. But even in the busyness, it’s never too early to start thinking about the new year. A little preparation in December can make a significant difference come January, especially when it comes to church finances. Taking time now to clean up systems and processes can help your church begin the new financial year with clarity and confidence.
One of the best places to start is the chart of accounts. Over time, most churches end up with accounts that no longer serve a purpose or don’t reflect their current ministries. Tidying this up by removing duplicates, renaming confusing accounts, and making sure everything matches the way your church functions will make next year’s budgeting and reporting far easier. Another simple but important step is reviewing vendor and employee records. Confirm that addresses, tax IDs, and contact information are all up to date before W-2s and 1099s are generated. It’s a small task now that saves a lot of frustration later.
December is also a perfect time to take a close look at designated and restricted funds. Every church has a few accounts that collect money over time but don’t get reviewed often. Reconciling those balances, closing old accounts that no longer have a purpose, and making sure each fund aligns with its intended ministry helps protect the church and strengthens financial integrity. Alongside this, churches should review any changes in compensation or benefits for the coming year. Updating payroll information (housing allowances, salary adjustments, benefits contributions, etc.) before the first January payroll run ensures everything starts smoothly.
Many churches also benefit from creating a simple financial calendar for the upcoming year. This doesn’t need to be complicated. Outlining key dates such as when contribution statements will be prepared, when monthly/quarterly reports are due, and when budget planning will begin can help keep the entire leadership team focused. December is also a good time to dust off the financial policies (benevolence guidelines, reimbursement procedures, cash-handling processes, etc.) and make sure they still fit your church’s ministry plan.
Finally, do your best to close out the year cleanly. Make sure all deposits and expenses have been recorded, bank statements are reconciled, and outstanding questions have been addressed. Entering January with accurate books sets the tone for a more organized financial year.
Good stewardship doesn’t begin in January, it begins now. By investing a little time in December, churches can step into the new year with strong systems, fewer headaches, and a clearer path to supporting the mission God has entrusted to them. If your church ever needs help navigating financial processes or strengthening its internal systems, the Arkansas Baptist State Convention stands ready to partner with you.