Fiscal Year

Church Budgets: When to Begin Preparing

It's September. Do you know what that means? It means that I'm on the verge of beginning another loosing season of Fantasy Football.

But apart from that, it also means that our church's annual budget season is upon us. At our church, our fiscal year matches the calendar year . . . which means that we are only four months away from needing to have a new, approved annual budget. In order to have our budget ready to go on January 1, we begin the process on September 1.

Now, we didn't pick that date arbitrarily. We arrived at it by "reverse engineering" our budget process. Let me explain.

Since we know we need to have an approved budget ready to go on January 1, and since our annual church budget must be approved by our members, we know that we have to have them vote on it during our Q4 Members' Meeting - normally held on either the first or second Sunday of December (depending on how the calendar looks in a given year).

In order to have them vote on it at that meeting, we must make it publicly available for review at least two weeks prior. This means that we normally have to have it completely finished and ready to go by mid-November.

Since our Elder board has to approve it before it is made public to our members, the Elder board wants to have a month to review, discuss, and tweak it . . . which means they need to have the first draft from our finance committee by mid-October.

In order for our finance committee to have it's recommended draft budget to the Elder board by mid-October, they need two things. First, they need to receive YTD budget reports along with a few specific, year-end financial projections from our financial secretary and Executive Pastor by the last week of September. Second, they need next-year's budget requests from all of the various ministry leaders within our church by the last week of September as well.

And, over time, we've learned that both of those things take a few weeks to get. So, to make sure everything works as it is supposed to, we begin preparing our new budget on September 1.

Obviously, that process is specific to our church and our setup, but regardless of how your church operates, I think there's wisdom in "reverse engineering" your budget process so that you can begin in a timely manner and complete your budget without too much stress.

Leave a comment below to share how your church handles this. Or, follow me on Facebook and leave a comment there.