The Church Treasurer's Handbook. Robert Leach
separate consideration of bounced cheques is considered below.
Counting the collection
A church collection typically comprises donations in envelopes for regular giving plus loose cash. The treasurer will rarely be responsible for counting and banking the collection at every service. Usually this task is delegated to sidespeople, ushers or people specially deputed for the task.
Some basic disciplines for counting the collection are:
the collection must be counted promptly after the end of each service
two people must always be present when the collection is counted
the loose cash is counted before the envelopes are opened
the envelopes are opened, and the amounts recorded against the name or identifying number on the envelope, on a list
a separate form is completed recording the total received in every different value of note and coin, whether from loose cash or envelopes
notes are held together in bundles of £100 by rubber bands
coins are bagged in cash bags provided free by banks in amounts of
– £20 for £1 and £2 coins
– £10 for 20p and 50p coins
– £5 for 5p and 10p coins
– £1 for 1p and 2p coins.
Do not mix coins of different values in the bag. Close the bag if it contains the full value, as indicated above. Leave the bag open if it contains less than the full value
cheques, foreign coins and anything else which has monetary value are recorded separately on the form, and are only included in the total if they can be paid into a bank account
keep the cash safe until it can be paid into the bank. It should either be kept in a safe, using a large cloth bag such as those which banks can be persuaded to provide free, or be taken home by the treasurer
the form should be signed or initialled by both of those who counted the collection
a record of the amount collected must be left at church premises.
Envelopes must have the amounts recorded in a manner which allows the donor to be identified, even if indirectly, such as against a list of numbers held by a stewardship secretary. This is not to check up on whether church members are ‘paying their dues’, but is an essential requirement for reclaiming income tax under Gift Aid; you may not know whether the donor had completed a Gift Aid form.
Paying money straight from the collection is not a good practice, and should be discouraged rather than banned. There is no problem if someone simply wants to change notes or coins from one value to another, such as handing over a £1 coin to have a stock of 10p coins as change when selling plants for 90p. You should discourage anyone from cashing a personal cheque from the collection.
If it is necessary to take money from the collection for any other purpose, such as to pay the choir or the refreshment team, ensure that full details are noted on the form. This will create a problem for your record keeping. If you received £200 and paid out £20, you will only bank £180 but must record £200 income and £20 payment. If a payment is made from the collection, it must be supported by such paperwork as is appropriate if you issued a cheque for the amount. See below. This means that those who count the collection will fill in two forms. First is the pledged giving form which can be as simple as the following:
The second form is an analysis of the cash receipts. A typical form is shown in Figure 2.
Figure 2: Collection Analysis Form
The form above allows for all eventualities, including receiving cheques, £50 notes, Scottish and Irish banknotes and other items. It also allows for non-collection items to be added, though these should normally be separately accounted for. The form allows for payments to be made directly out of the collection, though this practice should also be discouraged. Notes on what constitutes legal tender are given below.
Often someone other than the treasurer will arrange for the money to be paid in, usually on the Monday. It is then sufficient for that person to attach the paying-in counterfoil to the slip above and pass it to the treasurer.
Pledged giving
Churches increasingly rely on regular giving from members paid by standing order from the member’s bank account to the church’s. These matters are looked at in Chapter 17 on stewardship, usually administered by a separate stewardship secretary.
For the treasurer, the issues here are:
that both the treasurer and pledged giving secretary want the bank statement for their records
it is tedious for the treasurer to list each donation as a separate source of income
identifying donors in the main church records can be seen as a breach of confidentiality or sensitivity.
A convenient approach is to have a separate bank account for receiving such donations by standing order. The balance can be transferred to the main bank account once a month as a single figure entered into the records. The separate bank account is still part of the church’s accounts and so must be kept by the treasurer, but it makes it easier for both the treasurer and stewardship secretary to do their jobs.
Income in kind
Churches do not just receive cash, they also receive payments in kind through voluntary labour and gifts of assets.
Gifts of cash are always included in the church accounts.
Gifts of labour are not included in the accounts, although it is almost always the case that the church could not function without much voluntary work. If a church has a volunteer secretary, organist, youth worker, cleaner or whatever, the treasurer must resist any call to include a figure to reflect the value of that work. The church has not received that benefit in cash and it is false accounting to include it as such. Such a benefit would be difficult to value. Its inclusion would completely distort the accounts and destroy their purpose.
An exception to this may be needed if applying for a grant from certain bodies. In such cases, it may be appropriate to estimate the value of volunteer labour and treat this as both income in kind and expenditure in kind.
Gifts of assets for church use which are not consecrated or heritage assets usually are included in the accounts unless their value is small. Where someone gives a piano or computer to the church, that should be recognized as both income in kind and expenditure on the asset, which is usually a fixed asset. If an asset is donated for the church to sell, it is usually acceptable to include it only when sold, treating the sale proceeds as a receipt.
A church is not obliged to accept gifts they do not want. A church should not become a dump for old furniture and pianos.
Gifts may take the form of intangible income such as an interest-free loan, use of office space, temporary accommodation, professional services, and loan or free use of equipment. The general policy is that where the donor has borne expenses in providing the intangible income, an estimate of its value should be included as both income and expenditure. In other cases, the benefit should not be included. A discount or free business sample is not intangible income.
Trading income
In church accounting, trading means little more than incurring expenditure to receive income. It is not necessary that an activity has a commercial or fund-raising motive. Producing a magazine to promote the gospel is a trading activity if people