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AcctTwo Blog

Church Accounting Basics - Part 4: Employee - To Be or Not to Be

Employee - To Be or Not to Be

Why does it have to be so complicated?

If your church is anything like mine, you are constantly trying to navigate the requirements of our nation’s employment laws. When researching the topic of “employee versus independent contractor,” what I find is consistently inconsistent. It’s easy to get lost in the lack of interpretation. As church leaders, we run into several areas where the lines are blurred. We have clergy, employees, contractors and interns, not to mention volunteers. In all cases, for federal employment tax purposes — oh and by the way, we are not exempt from the labor laws just because we’re churches — there are rules that apply, and we must adhere to them.

In our last installment, “Internal Controls Keep Fraud at Bay,” we discussed how internal controls are put in place to clearly define proper procedures for finance and accounting team members, to minimize risk, and to alleviate suspicion. We pointed out that even churches must mitigate risk and ensure that policies and procedures are in place and functioning as intended. It can be somewhat overwhelming for pastors to focus on the eternal welfare of his or her parishioners and keep a pulse on financial affairs, specifically when it comes to defining good internal controls. Maintaining organized business operations is extremely important, but it must not intrude on mission-critical efforts.

I have been given the opportunity to share some of what I've learned in church finance and accounting via a series published in Church Executive Magazine entitled Church Accounting Basics. The series will include 6 installments - the first was published in April and takes a holistic view of church finance, asking the question, "What makes a healthy church?" The second was published in June and covers the 4 V's of church audits. The third installment was about Internal Controls and how to avoid fraud. This is the fourth installment. The remaining installments will be published in December, and finally in February of 2016.

For those that haven't yet subscribed to this wonderfully informative publication, I thought that would share these articles with you as they come out. Please click below to read the first four installments of this series.

Read Church Accounting Basics: Employee - To Be or Not to Be

And stay tuned as we will not only revisit basic best practices for churches, but also offer lesser-known strategies and processes that can improve (often long- standing) approaches and procedures. Subscribe to our blog, check back with us regularly, and visit churchexecutive.com for more information on keeping your church financially healthy.


About Tammy

Tammy Bunting - AcctTwo Director of Not-for-Profit ServicesTammy Bunting is AcctTwo’s Director for Not-for-Profit Services. She is also the CFO of Preston Trail Community Church in Frisco, Texas. Tammy has more than 25 years of experience in accounting, business administration, operations, and management. This includes work in both the secular and non-profit Christian environments. She’s been responsible for providing the controllership functions of all business environments at a multi-ministry church enterprise, and been a partner in a thriving Intacct value-added reseller business. Tammy was raised and educated in the Christian church, and has a unique perspective into the world of non-profit and faith-based business administration and accounting.

For help with accounting issues, best practices, or determining what tools you might need, please fill out the form below, and we’d be happy to talk to you.

Topics: Blog Fraud internal controls Informational Featured Posts Church Accounting Basics Awareness Employee vs. Contractor Not-for-Profit and Faith-Based