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Complete How-To Guide To Church Records Management

QUICK SUMMARY

As we all know, running a church isn’t just about the Sunday services or programs. There is also that element of “business”. And because churches are nonprofit, there is also the important task of record keeping. While the subject of “recordkeeping” can cue the yawns, proper financial and accounting records are the foundation of a […]

As we all know, running a church isn't just about the Sunday services or programs. There is also that element of “business”. And because churches are nonprofit, there is also the important task of record keeping. While the subject of “recordkeeping” can cue the yawns, proper financial and accounting records are the foundation of a well-run church. Good record-keeping provides support in so many ways.

With great record keeping, you should be able to instantly look up your incoming donations, outgoing expenses, membership statistics, and more. Record keeping also helps you stay compliant—and, if applicable, maintain your nonprofit status for tax purposes.

It’s not always easy to keep good records, but since records management is so important, you really need to dedicate time and resources to it.

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

What Kind Of Records Should Your Church Keep?

Detailed records help you keep an eye on church metrics like congregation attendance, online giving history, and finances. Some records need to be kept longer than others, so it’s important to research record retention laws in your country, state, or province.

Your church should keep records on everything that affects how the church runs. Here are some examples:

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.

Your federal and state or provincial laws will determine how long a church should keep records. Some financial records like tax returns and payroll reports need to be kept for at least several years.

According to the Canada Revenue Agency (CRA):

Official donation receipt copies (aside from those for 10-year gifts): Must be kept for a minimum two years from the end of the year of the donation.
10-year gift records: Must be kept for as long as the church is registered and for at least 2 years after the church closes.
Meeting minutes for director/trustee/executive meetings: Must be kept for as long as the church is registered and for at least 2 years after the church has shut down.
Members meeting minutes: Must be kept for as long as the church is registered and for at least 2 years after the church has shut down.
Governance documents and bylaws: Must be kept for as long as the church is registered and for 2 years after the church has shut 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 two years after the date of revocation.

For our American churches, there are no specific laws, but there is a Charity Guide created by the IRS that may help. In general, the suggestions from the IRS include:

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
Annual corporate filings or returns
Tax-exemption documents and correspondence
Property records

Records to be kept 10 years:

Insurance policies

Records to be kept seven years:

Bank statements, cancelled 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 two years:

Time cards and time sheets
Individual offering envelopes

How To Manage Church Records

Recordkeeping 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.

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 involved in managing your church’s records is clear on the procedures and what needs to be kept.

Identify The Church Records That You’re Going To Manage

Based on your local state laws you will need to figure out what records are imperative to keep. 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 if 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 make sure that 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

I would suggest that 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 to get it approved by your governing board. This shows 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.

How To Improve The Process For Church Records Management

You already know that a strong records management program is crucial to your church’s success. And even if you’re happy with your current strategy, there might be some areas to improve.

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 haven’t yet been documented.

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. In my opinion, delegating storage space to stacks of papers and files is not really needed. Of course, these days, the preferred method of record retention storage is the digital route, mostly 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 easier to send electronically!

Digital records can be stored on a computer hard drive, or on a network server either at your location or through the Internet.

Choosing the storage option that makes the most sense for your church will depend on your church's desires or needs. Talk to companies who are 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 for that matter. Finally, as I mentioned earlier, does your church have an attorney? If so, I would suggest asking them for guidance on creating a record retention program that works with your local legal requirements.

Related Read: Church Data Management Systems

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.

If you run a nonprofit local church, you might not have a large budget for church management software. Fortunately, some companies like TouchPoint and QuickBooks offer free or discounted software for churches. You can also find a list of free church management software options here.

Here are some things to consider when looking for Church management software:

User Interface (UI): Churches usually have lots of members. You are also dealing with a lot of information with 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 just add unneeded time and frustration to your day. Which is why I think it's also important that it has a Mobile App as well. You want it to be easily accessible.
Security: This is the most important feature I’m looking for! You want a software that is secure. Your congregation is trusting the church with important information, like phone numbers, emails, and credit card numbers for online giving. The software needs to have good security.
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 make sure 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 what your church needs.

Church records management is crucial to your church’s success. And picking the right software is vital! Take the time to do your research so that you make the best decision for your church.

Keep Your Church Thriving With Strong Records Management

Your congregation deserves a well-managed church. And church records management plays an important role in your church’s overall health. When you keep good records, your church can thrive.

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