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Church Accounting Best Practices: Payables, Check Requests, and Reimbursements

Increase accuracy, prevent fraud, and save time with these church accounting best practices.

Do you want to protect your church from fraud, overspending, and wasted ministry funds? Then you need to put church accounting best practices in place for something you probably do daily: Pay bills and make reimbursements.

When our partners get this right, they become more effective in ministry! They spend fewer hours tracking down receipts, figuring out if and when they should pay a given bill, or answering auditor questions.

Instead, if you implement church accounting best practices for payables, you’ll have more time for ministry and receive greater confidence from givers. Here’s what you need to know.

Related Resource: Your Church Financial Toolkit (PDF Download) ›

What are church accounting best practices for payables and reimbursements?

  1. Place two sets of eyes on every bill
  2. Collect W9s from vendors before sending payment
  3. Create standard billpay, check request, and reimbursement forms
  4. Choose an AP platform (accounts payable platform)
  5. Train your team on all of the church accounting processes that affect them

Let’s take these ideas one by one.

Step 1: Place Two Sets of Eyes on Every Bill

Create a process where two people review every bill: an Approver and a Payer.

The Approver’s job is to double-check the following:

  1. Account codes
  2. Amount
  3. The validity of the bill or reimbursement
  4. That there are funds available to pay the bill

The Payer:

  1. Signs the checks
  2. Has permission on behalf of the board or council to pay bills on the church’s behalf

Here’s why we recommend this.

First, you’ll prevent fraud and temptation. If one person approves payments and signs checks, your church is at higher risk for embezzlement.

Second, you’ll reduce simple errors that waste ministry money. Accounting errors can happen— a decimal in the wrong spot, transposed numbers, or an incorrect accounting code. These errors only become a problem when those errors slip through the cracks. 

For example, one of our team members works as a volunteer Payer for her church. She’s noticed that, from time to time, her Approver will send a check request that had already been paid through an alternate means (like a credit card). The “two eyes on every bill” rule keeps the church from overspending—or simply from the headache of having to ask for a refund.

Third, all payments will run through the same channel, preventing silos and confusion. Many churches have multiple people spending money in the same categories. If there isn’t a consistent process, bills may go unpaid or not have the appropriate oversight.

>>Note: The person approving a given expense should be higher or equal on the organizational chart to the person submitting the request. 

That means:

  • The Approver can’t approve their own requests for payment.
  • The Lead Pastor should submit requests for payment to the board or council, not to a staff member.
  • No one should have to approve or reject a payment request for someone higher than they are on the organizational chart.

Step 2: Collect W9s from Vendors Before Sending Payment

At the end of the year, many churches waste time as they scramble to collect W9s from vendors and contractors.

Here’s an easy fix: Create a process where you hold payments until the vendor has sent you their W9. Make this a non-negotiable process for your team, even if you pay them below the threshold amount. (You can automate this through your AP platform, which we’ll discuss later.)

Your team member doesn’t have to feel awkward about this. They can just tell the vendor, “Our process prevents me from sending payment until we’ve received a W9.” We find that if you’re holding their money, they’ll respond quickly!

But make sure the person who oversees the Billpay process (usually an Executive Pastor, CFO, Director of Operations, or Lead Pastor) is on board here. You don’t want that person to be misinformed and inadvertently undercut the Payer and Approver’s efforts.

For more on W9s, check out our related resource: The Complete Guide to Payroll for Churches ›

Step 3: Create standard billpay, check request, and reimbursement forms

You will save time, money, and effort if your teammates submit standardized forms for every expense. And though we know filling out these forms can be a pain, you can make it easy for your teammates. For example:

  • Keep paper versions in a common area, like your copy room.
  • Distribute them to individual desks.
  • Use a Google or Excel spreadsheet and allow staff to print it as a PDF rather than filling out a physical form.
  • Utilize software for invoices and reimbursements, such as a billpay software, reimbursement app, church management software, or giving platform

What should be included in a church reimbursement or check request form?

  1. Vendor Name
  2. Vendor Email
  3. Vendor Payment Preference (electronic payment or check)
  4. Vendor Address
  5. Accounting Category
  6. Description
  7. Reason for reimbursement (why the Approver should say “yes”)
  8. Invoice (attached to the form)

We recommend you keep the information you request to a minimum. Simple forms make it easier for your team to fill them out and turn them in on time.

Step 4: Choose an AP (Accounts Payable) Processor

Not all churches use an AP Processor (bill-paying software) but make payments through ACH. ACH payments are not the worst solution ever, but consider these benefits of an AP processor:

  1. An AP Processor enables teammates to work remotely without getting in the way of your church accounting best practices or controls.
  2. It lessens the need for paper by keeping all forms inside a single digital system (this is the 21st century, you know).
  3. An AP Processor digitizes your processes, making it harder for people to make mistakes (or circumvent them).

The biggest problem we see with ACH Payments is this: The automation happens outside of your church accounting software suite, so no one reviews these payments before they go out.

Say you’ve set up an ACH payment to a missionary. They receive a given amount from you monthly. But if that missionary leaves the mission field, and you don’t have an approval process to review your payment to them before it’s sent, extra payments to them are more likely to slip through the cracks.

Imagine the phone call: “Well brother, you know that money we sent you? We need it back.”

Save yourself the hassle. Switch to an AP Processor.

Best church accounting software for payables

Our favorite AP Processor for churches is BILL (formerly bill.com). We like it for several reasons.

First, your entire team can use it. BILL leads them to do everything according to your approved process. Then, it shows up in your financial team’s inbox for approval, all digitally.

Second, you can set up users with different permissions. You can choose what level of access each team member has to the information provided in a given payment request, so the youth pastor and the worship pastor don’t necessarily have access to each other’s expenses. 

Plus, you can set up and automate the roles of Approver and Payer. You can even create different Approvers for special scenarios. For example, you can choose a board member to approve the senior pastor’s expenses.

Third, BILL automatically syncs with QBO, reducing human error. The accounting codes, receipts, and amounts are all applied evenly and correctly across platforms. Then, you reconcile BILL monthly to ensure every invoice you think got paid did get paid.

Step 5: Train your team on all of the accounting processes that affect them

Take time to ensure everyone on your team understands these processes. Make it part of onboarding for new staff members. If someone has trouble filling out a form, help them. If you have a new team member, sit with them the first few times they go through this process so they feel confident.

But don’t just hit them with rules and procedures.

Start with “why.”

“Church accounting best practices keep us on mission.”

Every dollar your church spends can further the gospel or hinder it.

When you’re training people on accounting processes, keep the church’s vision before them. Help them understand your leadership team constructed the budget to accomplish the church’s goals of reaching and helping people. 

Your policies don’t exist simply to make “bean counters” happy. They exist to ensure people hear the good news.

“These best practices also protect you, the person requesting payment.”

Policies and procedures around payment and bill pay keep individuals from making errors while keeping the church above reproach.

And yes, auditors are trained to look for signs of non-compliance. You don’t want to make them ask awkward questions no one cares to answer.

Wanna get your reimbursements and check requests on track? Here’s the process.

  1. Analyze current systems, forms, and processes
  2. Set up an approval chain
  3. Create helpful billpay, check request, and reimbursement forms
  4. Set and document new policies and procedures
  5. Choose a suite of church accounting software solutions

You can do this yourself, but if this sounds like something your church needs help with, we’d love to talk. 

We’re a team of financial storytellers with superpowers in accounting, bookkeeping, and consulting. We help leaders place every dollar on mission so their money can tell a better story about God’s kingdom.You can get started by setting up a free 30-minute consultation with a Parable Financial Storyteller.

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