Accounting and Reconciliation for Online Giving

Today, congregation members are not carrying cash and check, that is why online giving makes it easier than ever for your givers to donate. A lot of churches are now implementing giving kiosks , mobile fundraising, and crowdfunding in order to capture credit and debit donations because everyone carries "plastic". In fact, after a recent study of donations given, it was revealed that over $2 billion were given online in 2015! This answered for a 9.2% increase in online giving in 2015 compared to 2014 and those numbers are still rising! While these facts are great for increasing donations in the church, it does pose some challenges to the bookkeepers for properly keeping track of those donations and accounting for it all.

One accounting issue is that accepting donations online has your church or nonprofit reconciling your bank account, constantly. This reconciliation can be very easy with many online donor management softwares, such as Continue to Give, or nonprofit accounting softwares, such as Aplos, available today with great features like bank integration, batch reporting, and real-time reporting. These softwares not only make giving easy but they streamline the process from donation to bookkeeping.

In reality, many churches and nonprofits will procrastinate on reconciling their books until the end of the month to account for online giving (which is not the best). To have the best accounting results you should reconcile every other week or every week. In addition, if your nonprofit receives more than 20 donations a day we would recommend reconciling every day. The simplest way to record the contributions donated and balance them with your bank account is to enter the online donations the same way they are reflected in your banking records. This keeps the audit trail clean.

We have a great example spreadsheet below. Take a look and you will see that there was an electronic deposit of $12,017.34 on June 30th. The bookkeeper then used her online giving statements and batch reporting on Continue to Give to reconcile the banking records.

Here are quick tips about the spreadsheet:

1. A = The total payments given (Dan gave $250). Dan should get a contribution statment for the full $250
2. B = processing fee, transactions fee, merchant account fees, online giving service, etc. that are related to transaction of the donated amount.
3. C = A-B Physical Cash (this is the amount of money your nonprofit ends up with after the fees are subtracted)
4. D = This is the journal entry you will make

Remember these suggestions are not meant to be a substitute for professional services, just some tips and resources. Always consult a trusted professional such as a CPA if you seek tax or accounting advice.

If you are looking for more ways to increase giving in your church you can read about How to Grow Your Church Giving