The Importance of Financial Management By Vonna Laue
Financial Management Matters!
For our programs and ministries to be successful, we need to realize financial management matters.
It is nearly impossible to accomplish the mission of your organization without cash and that is why financial management matters. Sometimes we are so focused on the specific program activities and outcomes that we neglect the infrastructure of the organization. This may work in the short-term but it will have dire consequences long-term. Here are some practical suggestions to build an environment where financial management can be successful in your ministry and work to make everyone successful in their roles:
Staffing and Training
Having the right people in the right seats is a concept Jim Collins made popular in his book “Good to Great” We need the right skill sets in every position. If the accounting function is not done well, it can be detrimental to financial management overall. Hire well and if you make a mistake move the person to a better fitting role or move them out. This is not unchristian. This is good stewardship. Additionally, be certain to provide the necessary training to keep each staff member trained and current in their role.
The business functions of an organization are often seen as bureaucratic and burdensome. These functions, such as financial management, actually serve to protect the ministry and even the staff. To help individuals understand this, there must be an intentional emphasis on building relationships throughout the organization and communicating well. Examples of this might include:
- Explaining the “why” behind a policy – An example would be to explain that conforming to expense reimbursement policies keeps the reimbursed amount from being treated as taxable income to the employee. They’ll appreciate your help if they understand this.
- Staff “fun days” across departments – Getting people out of their role and interacting on a more personal level will allow employees to see each other in a new way and make them more relatable.
- Allow the support staff to “volunteer” in a ministry area – Provide accounting department staff one day periodically (quarterly, annually, etc) where they work in a direct ministry role. They likely came to your organization because they had a heart for your mission. Allowing them to do this will remind them of the importance of your work but it will also help them understand how the financial management policies and procedures they enforce could be adjusted to make it easier for the front line employees.
Good financial management does require policies and procedures to be well-documented and kept current. This should be customized for your ministry to be relevant. One person should have the responsibility to oversee this function and to incorporate any necessary changes. However, there needs to be buy-in throughout the organization beginning from the top down. It is important to have both a policies manual with appropriate operating policies as well as a procedures manual that will allow individuals to understand how to perform each function within the realm of the ministry’s financial management.
We all desire our ministry to be successful in carrying out the called purpose. To this end, it is important to remember that financial management matters and we all play a part in its success.
Vonna Laue is a CPA with an MBA in Leadership and HR Management. She has served ministries and churches for nearly 25 years through auditing and consulting.
Vonna Laue is facilitating the Outcomes Academy Online module, Day-to-Day Financial Management, that is available during the Winter Term. During this module, you will discuss this topic in-depth and expand on others that will help you understand the basics of financial management and how to perform well in this area.
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