CA$H Management
A Valuable (But Unfamiliar) Stewardship Tool for Churches

By Michael Becknell

Cash management is a tool with which many church leaders might be unfamiliar, and it’s unlikely any courses on the subject are included in a seminary curriculum.

However, as a concept and in practice, cash management has existed to some degree for at least 2,000 years. Christ Himself illustrated its basic principles in his “Parable of the Talents,” as described in the Gospel of Matthew (25:14-30).

In essence, cash management, as it applies to churches, is simply another term for stewardship. It allows church leaders to take advantage of the latest technological breakthroughs offered by financial institutions (including electronic-banking services) to more effectively manage the resources entrusted to them.

Using the electronic capabilities now available in modern cash-management systems, church business administrators can access key financial data more quickly and with more reliability than ever before. A key feature is information reporting, which provides the church’s current cash position and up-to-the-minute reports on bank deposits and withdrawals. Equipped with this information, the business administrator can immediately place funds where they can most effectively be used or invested. Electronic banking is available around the clock from any location.

Another feature gives church officials the capability to transfer funds between church accounts, either at their own bank or among other financial institutions. And because electronic banking reduces or eliminates the need for paper transactions, the church will realize savings on its bank-service fees.

Cash-management services provided by banks also offer security protection to churches at levels greater than were previously possible. An account-reconcilement system, for example, not only reduces a church’s workload and related costs, but minimizes errors, improves audit control and provides protection against payment of unauthorized, altered and stopped checks.

Additional protection and cost savings can be achieved by having paid checks returned to the church electronically via CD-ROM, eliminating the need for further handling and storage of paper documents.

For larger churches, handling a heavy volume of coins and currency can be risky and time-consuming. Cash-management services include a fast, efficient way to handle the church’s cash deposits, deliver timely feedback and detailed reports, and, upon request, provide for armored-car service for regular pickups of cash.

A church’s relationship with its financial institution is an extremely important one. Church leaders would be well advised to deal with a financial institution that offers the most up-to-date electronic-banking capabilities.

Additionally, they should seek an organization that offers Automated Clearing House (ACH) services. The purpose of the ACH is to facilitate the paperless transfer of funds, eliminating paper-check handling by electronically transferring funds. It also provides a practical, economical method for making recurring payments, including payroll and donations.

Directly depositing payroll to employee accounts is the most widely used application of ACH. Simple and confidential, it increases employee productivity by reducing lost time on paydays and allows the church to offer a valuable benefit to employees. Funds are deposited right into the employee’s account; there are no checks to endorse, no deposit slips to complete, and no need to wait in line for the next available teller.

An electronic payroll system also provides significant savings and added convenience for a church. Not only does it eliminate the time and expense required to prepare and distribute paper checks, but many payroll-software systems generate and electronically transmit tax data — including Forms 940 and 941 — to the appropriate government agencies.

Church employees aren’t the only ones who can benefit from ACH. Church members who wish to make contributions on a regular basis can arrange to have their personal bank accounts periodically debited in predetermined amounts, with their donations automatically and securely transferred to the church’s account. This system is not only convenient for church members, but also eliminates the cost of checks and postage. Donors might also designate their gifts for specific projects such as capital campaigns or overseas missions.

Another valuable service electronic banking can provide to churches is the ability to receive funds from, or transfer funds to, almost anywhere in the world via Wire Transfer, right from a computer. This can be especially important to men and women who serve as missionaries in remote areas of the globe. Rather than having to wait for weeks to receive a check through the mail, they can have immediate access to cash automatically deposited to their account overseas.

Because of rapidly changing and expanding technology, church business administrators and others with responsibility for church finances should develop strong, proactive relationships with the cash-management experts at their banks. One recommended resource in this field is the Association for Financial Professionals, a nationwide organization open to anyone providing up-to-the-minute information on cash-management protocols and other financial topics.

Excellent resources are available on the organization’s website, www.AFPonline.org. For example, AFP offers an online self-study course titled “Cash-Management Fundamentals.” Participants can study at their own pace or take advantage of instructor-led seminars designed to make them proficient in cash-management strategies and techniques. Sessions are held periodically at various locations around the country.

By taking advantage of these resources — and by maintaining a solid relationship with a financial institution that offers a full range of cash-management products and services — church leaders can equip themselves to evaluate and implement those tools, enabling them to be highly effective and faithful stewards of the funds entrusted to them.

Michael Becknell is a cash-management consultant and vice president of Bank of the West in Henderson, Nev. For more information, call 800.758.8813 or visit www.bankofthewest.com.