The Pastor’s Complete How-To Guide: Church Records Management
Messy records are a fast track to ministry chaos. (If good church record management sounds suuuuper boring, consider just how exciting losing charitable status would be…let’s avoid that, shall we?)
Running a church involves more than just Sunday services and programs. It also requires meticulous record-keeping. While record-keeping might seem dull, it's the foundation of a well-run church. Thankfully, my team and I have researched, evaluated, and ranked the best church management software to simplify this task. And, if your church budget is super tight, we've got our recommendations of the best free church management software also.
Church record management is important because it ensures transparency, legal compliance, and efficient management. (How long you keep your financial records is dependant on IRS guidelines.)But: those records allow you to track donation, monitor attendance, and maintain financial health, which supports the church's mission and accountability to its members and the government. Though it can be challenging, dedicating time and resources to records management should be a non-negotiable.
Be sure you know the condition of your flocks, give careful attention to your herds.
Proverbs 27:23
In this article, I’ll cover:
- What Kind Of Records Should Your Church Keep?
- How Long Should A Church Keep Records?
- How To Manage Church Records
- How To Improve The Process For Church Records Management
How much 'church record management' is necessary?
What kind of records should your church keep? Well, detailed records help you monitor important church measurables like congregation attendance, online giving history, and finances. Some records need to be kept longer than others, so it's vital to research record retention laws in your country, state, or province.
Your church should keep records of everything that affects how the church runs:
- Finances
- Congregation attendance
- In-person donations and online giving
- Staff and volunteer rosters
- Legal Records
- Historical Records
How Long Should A Church Keep Records?
Different documents have different retention periods. So, your records management program must include a records retention schedule. This helps you keep track of your church's overall health—and stay compliant with the law.
Federal and state or provincial laws will determine how long a church should keep records. Some financial records, such as tax returns and payroll reports, need to be kept for at least several years.
For our American churches, the IRS created a compliance guide for 501(c)(3) entities. In general, the guidance from the IRS is as follows:
Permanently Retained Records
- Corporate records, including articles of incorporation and bylaws.
- Meeting minutes, including all related reports.
- Audit reports.
- Annual financial statements.
- Tax returns submitted.
- Corporate yearly filings or returns.
- Tax-exemption documents and correspondence.
- Property records (part of church property management strategy)
Records Retained for 10 Years
- Insurance policies.
Records Retained for 7 Years
- Bank statements, canceled checks, and bank reconciliations.
- Worksheets and supporting documents for tax returns.
- IRS Forms.
- Payroll tax records, including payroll registers, W-4 forms, and payroll deductions.
- Employee expense reports.
- Employee personnel records after separation from employment.
- Contracts and related correspondence.
- Investment records.
- Annual audit records and worksheets.
- Insurance letters and all correspondence.
- Individual giving records.
- Accounts payable records.
- Tax bills, receipts, and statements.
Records Retained for 2 Years
- Time cards and time sheets.
- Individual offering envelopes.
According to the Canada Revenue Agency (CRA):
- Official donation receipt copies (aside from those for 10-year gifts) Must be kept for at least two years from the end of the donation year.
- 10-year gift records: Must be kept as long as the church is registered and at least 2 years after the church closes.
- Meeting minutes for director/trustee/executive meetings: These must be kept as long as the church is registered and for at least 2 years after the church shuts down.
- Members' meeting minutes: These must be kept for as long as the church is registered and for at least two years after it has shut down.
- Governance documents and bylaws: These must be kept as long as the church is registered and for 2 years after it shuts down.
- Ledgers or other books containing summaries of transactions and the related accounts: Must be kept for 6 years from the end of the last tax year while the church is registered and for 2 years after the church has shut down,
- Financial statements, source documents and copies of annual information returns: Must be kept for 6 years from the end of the last tax year or, if the church has shut down, for 2 years after the revocation date.
Records to be kept permanently
- Corporate records, including articles of incorporation and bylaws
- Meeting minutes, including all related reports.
- Audit reports
- Annual financial statements
- Tax returns submitted
- Corporate yearly filings or returns
- Tax-exemption documents and correspondence
- Property records
Records to be kept for 10 years
- Insurance policies
Records to be kept for seven years
- Bank statements, canceled checks, and bank reconciliations
- Worksheets and supporting documents for tax returns
- IRS Forms
- Payroll tax records, including payroll registers, W-4 forms, and payroll deductions
- Employee expense reports
- Employee personnel records after separation from employment
- Contracts and related correspondence
- Investment records
- Annual audit records and worksheets
- Insurance letters and all correspondence
- Individual giving records
- Accounts payable records
- Tax bills, receipts, and statements
Records to be kept for two years
- Time cards and time sheets
- Individual offering envelopes
Store digital copies of your records in cloud storage services like Google Drive or Dropbox. This ensures your records are backed up and can be accessed from anywhere. ALSO: cloud storage often includes automatic version control, so you can easily revert to previous versions of a document if needed.
How To Best Manage Church Records
Record keeping requires attention to detail and a love of numbers. So you'll need to appoint the right person to the records management position. Your church board should appoint one person to oversee your records management program.
And because record keeping is so important, it's usually best for the records manager to be a full-time member of the church staff or clergy rather than a volunteer from your congregation.
But everything should be done in a fitting and orderly way.
1 Corinthians 14:40
Create A Policy For Record Management
A records retention policy sets out how long records must be kept and includes guidelines and processes for how and when to dispose of records. This ensures that everyone managing your church's records understands the procedures and what needs to be kept. I also recommend ensuring you're using your church giving software to generate regular and relevant records!
Identify The Church Records That You're Going To Manage
You will need to determine what records are imperative to keep based on your local state laws. Use the guidelines above as a starting point.
Implement A Retention Schedule
You will have to figure out what works for your church based on your local laws. A lot will also depend on whether you are keeping physical or digital records and how you will review and audit your statistics and records on a regular basis. Have someone in charge of implementing this, and ensure all church staff members understand and follow the filing system guidelines. A central file room for physical records may be a good idea.
Establish Retention And Destruction Policies
Whatever you decide, make sure your policy is documented properly in writing. It would also be beneficial to have it reviewed by legal counsel and approved by your governing board. This shows that it was a considered organizational decision, not just something you put together of your own accord.
Here are some samples of church retention and destruction policies you can use as a starting point.
- Records Retention Sample Policy: The Evangelical Council for Financial Accountability
- Retention Guide Examples from Local Churches: The North Texas Conference of the United Methodist Church
Improving Your Church Records Management Process
You already know that a strong records management program is crucial to your church's success. Even if you're happy with your current strategy, there might be some areas for improvement.
First, audit and review your current records. This might include filling in the gaps if there's any missing information, such as missing meeting minutes or official bylaws that still need to be documented.
By wisdom a house is built, and through understanding it is established; through knowledge its rooms are filled with rare and beautiful treasures.
proverbs 24:3-4
Here are a few questions to ask yourself as you improve your records management:
- Do you use a records center, or are your records on-site?
- How accurate and current are your records?
- Are you archiving or disposing of your inactive records?
- Are you using church management or records management software?
A big part of answering these questions is whether you have hard copies or digital copies of your records. I think delegating storage space to stacks of papers and files is optional. Of course, the preferred method of record retention storage is the digital route, mainly because digital files are much more likely to survive a disaster. In addition, it is also a lot faster to search through digital files than paper files and more accessible to send electronically!
Digital records can be stored on a computer hard drive or a network server at your location or in the cloud.
Choosing the storage option that makes the most sense for your church will depend on your desires or needs. Talk to companies familiar with document imaging and storage technology and discuss the best way to index records for search and retrieval.
Also, keep records security in mind—data loss can be devastating for a church or any business. I suggest consulting with your church's legal experts for guidance on creating a record retention program that meets your local legal requirements.
Consider Church Management Software
Church management software can be crucial in helping manage all types of records, including financial records, congregation membership records, and others such as those described above. Here are some things to consider when looking for Church management software:
- User Interface (UI): Churches usually have many members, and you deal with a lot of information from each member. You will want an interface that is clearly understood and easy to use. Having an interface that is too complicated or hard to use will add unnecessary time and frustration to your day. This is why I think it's important that it has a mobile app as well. You want it to be easily accessible.
- Security: Your congregation trusts the church with important information, like phone numbers, emails, and credit card numbers, for online giving. The software needs to be secure.
- Value for $: Does it have features that make its pricing reasonable? Do they offer a free trial? Having a free trial is imperative. You want to ensure the software is the right fit for your church. You don't want to commit to a contract or payment and then find out the software is too complicated or not in line with your church's needs.
Church records management is crucial to your church's success. Picking the right software is vital! Take the time to do your research so that you make the best decision for your church. We’ve done the legwork to help you choose the ‘just right’ church management software.
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Also Worth Checking Out:
- Technology In The Church: What Do Lead Pastors Need To Know?
- How To Conduct Church Financial Management + Best Practices
- What Is Church Software? A Complete Guide For Lead Pastors
- How to Organize a (Successful) Church Conference
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