Cost Management – Part 3 (Structure)

As I jump back into the cost management posts, I have learned one major thing through this so far.  I have learned that you have options when determining how to setup you cost structure and tracking techniques.  You could track costs in a very simple way by using averages to determine overhead costs or you could find ways to tie overhead costs directly to departments.  It all depends on what you are trying to accomplish in your cost accounting.

In the past at Faith Promise we had some standard overhead costs, but many times those were built directly into the budgets of departments.  We have moved away from this to a system that tracks the type of purchase and the department it was purchased for.  I am not completely sure we are setup up in an optimal way, but I keep considering better ways to track costs.  The bottom line is that you can setup your cost structure in various ways, but you should consider the following things as you review your structure:

1. What do I want to learn from the costs we incur?
2. What information would better help the decision making process?
3. Do I want to have some flexibility in our cost structure to allow for some adaptability?
4. What requirements do we have to meet when presenting cost data?

What other things should be considered when setting up or revising your cost tracking system?

Church Finance Tools #5, #6, and #7

This is the last post in this series about church finance tools.  This post includes three essential tools to my office and any finance office.  Here goes:

• Excel.  While I believe the right management software or accounting software can meet most of your needs, there is always a place for Microsoft Excel.  You can do almost anything with data when you import it into Excel.  Recently I was introduced to pivot tables and the endless possibilities of their use.  Thanks Glenn!!!

• Pencils. OK, so this might sound a little silly to list as a tool, but for a lot of what I do a pen just won’t work.  When trying to figure out the best way to do something I will write, erase, re-write, erase, re-write, etc.  You can only do that effectively with a pencil.  

• Calculator.  I may love numbers, but that doesn’t mean that I am able to perform complex or even simple mathematical equations in my head.  Without a calculator I would be in trouble.  It would take a ton of time to do the calculation by hand.  Maybe this should have been tool #1 for me!!!

There are a lot of tools that people can use in a church finance office, but these 7 are my essentials (Volunteers, FellowshipOne, ADP, Intacct, Excel, Pencils, and Calculator).  What am I missing?  What tools do you use for what you do to make you more effective?  I am always looking for things to make the finance office better at Faith Promise Church.

Church Finance Tool #4

As promised in yesterday’s post, I am discussing our accounting software today.  Last December we decided to change our accounting software over to Intacct.  I don’t know if I have ever had a harder time in making a decision than the selection of accounting software.  We looked at all different solutions and after months of consideration, we decided Intacct was the best fit for us.  Below are some of the features that are a benefit to00 us:

• Electronic purchasing system.  Intacct allows us to automate our purchasing process. People can make purchase requests from anywhere via the internet and that request will flow through electronic approval.  This gives the requester the ability to see where their requests are in the approval process and they can also better monitor their budget info through the web based system.

• Great reporting function.  The reporting feature within the system is very well done.  You can begin with a good number of default reports, but you can also customize those reports to better meet your needs.  Most organizations have unique reports that management likes to review, so the system offers great flexibility in getting the right information in the right layout.

• Web based system.  I know you have heard this on both the FellowshipOne and ADP posts, but it is something I have become a big fan of.  We don’t have to worry about any software updates, we can turn our paper processes into electronic processes, and there is no software to chew up your computer or server resources.

I believe that our decision to go with Intacct will allow us to accomplish great things for Faith Promise Church.  We are more efficient and effective in our operations.  In addition, purchasing and budget information can be consolidated to identify areas of cost savings.  Anyone considering new accounting software (Church or not) should consider Intacct as a possible solution.  We are extremely pleased.

Church Finance Tool #3

Last December, I decided to change our accounting software.  I will address that in more detail tomorrow, but the change also required us to change our payroll software.  We had been running all payroll in house with the payroll module on our old software.  When we made the change, we decided to go with ADP.  So far, we are very pleased.  Here are some of the major reasons I like using ADP:

• It is completely web based.  I am able to input, review and process payroll from anywhere I have an internet connection (and the appropriate web key).  This gives me great flexibility in running payroll.  Also, our employees are able to input their time sheets electronically and their supervisors can approve from anywhere they have an internet connection.  We have been running this with a small sample of employees and it has worked great.  We will be rolling it out to all hourly employees soon.

• Tax updates and other software updates are done by ADP and I don’t have to do anything.  I just use the sytsem without worrying about management of the actual software.  This eliminates our need for internal IT support and for servers to backup the data.  ADP holds and backups all data on their servers.  All we need is an internet connection.

• ADP processes our payroll through the bank, pays our payroll taxes, files our quarterly tax reports, and files our annual W2 forms.  This saves us a lot of time, especially at year end.  In addition to all of this, we are able to do an easy export from ADP to our accounting system for all general ledger entries related to each payroll run.

We decided to go with ADP, mostly because we needed something that would work well with our new accounting software.  That being said, we have been extremely pleased with ADP.  When it comes to payroll, ADP does it well.  Tomorrow I will talk about our new accounting solution.

NACBA Metro Group Recap

Last Sunday Josh and I traveled down to Church of the Highlands (COH) to meet with the NACBA Metro group.  It was our first time meeting with the group.  It was a great trip and here are some major thoughts that I came away with:

• Robert Hodges, Business Administrator of COH, was a great host and knows how to provide a great lunch!  I don’t know if I have ever had so much fried food in one meal!!!
• Glenn Wood, Business Administrator at Seacoast, is a smart guy, but more importantly he has a passion to unite church business administrators to increase effectiveness at their respective churches.  I can’t think of anyone better to lead this push.
• Churches may be similar in size and style, but that doesn’t mean that they are the same.  There were churches with different structures and processes to provide the administration needs of each church.  We can still learn from each other and improve our operations.
• Technology is advancing rapidly and will provide great opportunities to better support the needs of our expanding ministries.  Thanks to Nick Nicholaou for the glimpse into the future.
• Lastly, but most importantly, Business Administrators do know how to have a good laugh.  Phill Martin  was the leader on this front.  The NACBA should be proud to have him on staff.  Great guy.

I look forward to continuing to learn from this group as we find new ways to connect.  Business Administrators may operate behind the scenes in most instances, but it was evident there were some great leaders in the group.

NACBA Metro Group

This Sunday, I am headed to Church of the Highlands in Birmingham with Josh Whitehead.  We are going down to meet with a group of Executive Pastors, Business Administrators and other church admin folks.  Glenn Wood at Seacoast Church encouraged me to attend and I am really looking forward to learning from some great leaders.  Most people think I am weird, but I really have a passion for church organization and administration.  I want to help Faith Promise Church fulfill its God given mission by encouraging the use of good organizational practices.

The other cool thing is that we are starting to connect with our local NACBA chapter and learning from that group as well.  I am so grateful for the opportunities to connect with people that share the same challenges I experience on a daily basis.  Together we can help improve our respective churches and positively impact the Kingdom.  After all, we are all on the same team working towards the same goal.