3 Solutions for Expense Reporting
Whether you are a church planter or a well-established church, your leadership team will need some way to pay for its ministry expenses. Most churches will have some sort of credit or debit card, or they will choose to reimburse leaders for expenses. Whatever means by which money goes out, it is crucial that every organization account for how that money is spent. Early on, as a church planter with very few expenses, I managed this by simply making notes on incoming credit card statements.
Unfortunately, this simple method didn’t last long. As our church plant grew, so did the number of transactions. Eventually, other users would be added to our credit card. We were forced to think through a critical question. As a church that wants to be good stewards of our resources, how will we account for this growing number of expenses? How will we ensure that money given for the ministry of this church is used for that purpose? How will we stay within the boundaries set by our budget? How will we protect against leaders misusing their power to spend?
For this reason, every church needs some sort of expense reporting process. Not just any process but one that is able to grow with your organization and, ideally, one that doesn’t overload your leadership team with paperwork. Our church plant’s early process of hand-coding credit card statements wasn’t scalable (able to grow with us) and took way too much time. Perhaps your church has felt similar pains with your expense reporting process, or you realize now that you don’t have a process. The good news is that there are some beneficial tools and processes you can put in place to help solve this issue. One size doesn’t fit all, so I want to offer three helpful tools that might help your church improve its expense management process. These tools can scale with the size of your church and minimize your team’s time spent tracking expenses.
Excel Spreadsheets (for churches that only do reimbursements) - For churches that want to stay with reimbursements (not issuing church cards), creating simple excel spreadsheets can be a helpful solution. This certainly puts a bit more work on your team, but it’s an effective control for spending. I work with a church that does this well. Each month, employees submit a spreadsheet with expenses grouped under various budget headings. Once these expense report spreadsheets are approved, they are sent to Bill.com, where our team at ChurchBiz then processes the reimbursement. Because the spreadsheets have expenses listed under different budget categories, we can code the totals for each category when we issue the reimbursement through Bill.com (which then syncs up with our accounting software).
The Good
Provides a high level of control over spending. It will not be reimbursed if someone charges something unrelated to a ministry budget or use.
Free - Most churches already have a Microsoft Office license for Excel or can use Google Sheets for free.
The Bad
Puts a decent amount of work on the staff or leadership team. They have the burden of utilizing their credit card, downloading the statements, dividing out their charges, and then putting all that on a spreadsheet. It can certainly work, but it is not the most time-efficient method.
This method can become messy without a tool like Bill.com and a well-defined excel template. It could create a large amount of work for the staff team and those attempting to give financial oversight.
Learn more about Google Sheets (Link)
Expensify (a slightly better option for debit or credit card users) - Expensify has proved to be a helpful tool for many people looking to simplify expense reporting. I discovered Expensify when looking to solve this issue for our church plant, and we have used it for several years. Expensify is a web tool allowing users or administrators to create digital expense reports. This is done by either importing charges (downloading a CSV or excel file from your CC and then uploading it into Expensify) or manually creating charges. One nice feature of this software is it allows users to upload receipts from the iPhone or Android app. Once charges are uploaded, they can be categorized and put into an expense report. From here, a finance team member can approve the report and have it automatically sync up with accounting software.
The Good
Can significantly reduce paperwork while maintaining excellent spending controls.
Has an excellent iPhone/Android app and is relatively easy for your staff team.
Plenty of helpful features or customizable options make it a flexible solution for any church.
The Bad
Cost - Expensify has regularly increased its rates and now charges $18 monthly per user. A staff team of 5 people needing to use the software each month would cost your church $90 per month.
Complexity - Expensify can also be confusing with all its features and options. While its phone apps are simple, the website used to administrate it can be pretty confusing. It has a steep learning curve and can be challenging for most church administrators.
Lack of Sync - Most credit cards or debit cards will need to have charges manually imported into Expensify. It would be great if these charges would automatically sync with existing cards, but most will not.
Learn more about Expensify (Link)
Divvy (my personal favorite) - Divvy is a newer expense management tool I first came across last year. Divvy is owned by Bill.com and is slowly integrating more with Bill.com’s services. Divvy is essentially a Visa card that comes with outstanding expense reporting software. Like Expensify, Divvy has a website for administrators and an easy-to-use app for card users to report expenses. When a user makes a purchase, they can be immediately prompted on their phone to code that purchase and capture a photo of their receipt. Whoever oversees the church’s expenses can view these charges from the Divvy website, where they can keep tabs on what is spent. Once the administrator approves the charges, they can automatically sync with most accounting software. Divvy eliminates the need for any sort of uploading or manual expense tracking.
The Good
Simple - Divvy is more straightforward for the user and the administrator. The app is well-designed and easy to use. The website is simple for those tracking spending and has plenty of customization features.
Support - Divvy has been incredibly helpful in my experience with them. They provide an onboarding specialist for each new client and guide you through the application process to implementation.
Price - Did I mention that Divvy is 100% free? Divvy makes its money through its share of the Visa transaction fees to provide expense management software for free. I have worked with several churches that switched to Divvy and are saving hundreds of dollars each month.
Rewards - Divvy also accrues credit card points for users like a traditional credit card. Divvy users must use the card for one year and then are eligible to redeem it through their Divvy rewards site.
The Bad
Low Credit Lines for New Churches - While I can’t think of any complaints about the expense reporting aspects of Divvy, one challenge has been that it can be hard to get good credit lines approved for brand-new church plants. They have some workarounds for this, but it’s still a work in progress.
Underdeveloped Reimbursement Feature - With Divvy, I certainly have to nitpick to find faults, but one feature lacking is their reimbursements. In my experience, it seems like it has promise, but I wouldn’t recommend using Divvy for this purpose (use Bill.com instead).
Hopefully, that gives you a couple of helpful options to consider. If you need help with any of this, please reach out. ChurchBiz would love to help however we can.
