Sage 50 Accounting can be used for church accounting, although it is not specifically designed for churches or nonprofit organizations. Many churches use it successfully by configuring the chart of accounts and reporting structure to match nonprofit accounting requirements. It is easy to do once you know some of the shortcuts to make this successful.
Here are some common ways churches use Sage 50:
- Sage 50 can be used for Church Fund Accounting. (with workarounds)
Churches often need to track:
- General Fund
- Building Fund
- Missions fund
- Youth Ministry Fund
- Memorial Funds
- Restricted Donations
Sage 50 does not provide true nonprofit fund accounting like dedicated church accounting systems do, but you can:
- Create separate income and expense accounts for each fund.
- Use departments, cost centers, or account segments (depending on your Sage 50 version) to track restricted and unrestricted funds.
- Use Inventory Service Items to make posting donations and expenses easier for non-accountants.
- Generate reports by fund using GL departmental segmentation.
2. Donation Tracking
You can:
- Record member contributions. The members are set up as customers. You can track members by giving groups, children or families. You can also set up everyone, so you have their specific name, phone number, email address and age for children to aid in children’s ministry. Mailing labels can be produced for each group. (It is best to work with a Sage Consultant to get the most out of the Sage 50 program for the initial setup.)
- Track donor histories.
- Produce contribution summaries.
3. Budget Management
Churches can:
- Create annual budgets.
- Compare actual spending against budgets.
- Monitor ministry-specific budgets.
- Produce reports for church boards and finance committees.
4. Payroll
Sage 50 can manage:
- Pastor salaries.
- Church staff payroll.
- Housing allowances (when configured properly).
- Payroll tax reporting.
Because clergy tax treatment can be complex, churches may choose to work with a CPA or accountant familiar with church payroll regulations.
5. Financial Reporting
Typical church reports include:
- Statement of Financial Position (Balance Sheet)
- Statement of Activities (Income Statement)
- Budget vs. Actual Reports
- Fund Balances
- Cash Flow Reports
These can be customized in Sage 50 to resemble nonprofit financial statements.
6. Accounts Payable and Receivable
You can manage:
- Vendor payments
- Utility bills
- Ministry expenses
- Facility maintenance costs
- Tuition or rental income (if applicable)
Advantages of Using Sage 50
- Well-established accounting platform.
- Strong general ledger and reporting capabilities.
- Good payroll integration.
- Suitable for small to medium-sized churches.
- Lower cost than MOST enterprise nonprofit systems.
Limitations for Churches
- Out of the box, not a true fund accounting software, but I can be simply modified to provide fund accounting with the use of “Job Costing”
- No membership management.
- No online giving management included with the program but could be easily added with a 3rd party application that we offer at BestBusinessStrategies.com
- Initially more setup and customization required than church-specific solutions. Once set up correctly, the program will prove to be less expensive in the end and offer as much as church specific solutions.
Best Business Strategies has been using Sage 50 for church and nonprofit accounting for years. We actually have a template we will give you at no extra cost when you purchase your Sage 50 from us.
For more information please contact:
Shirley Byard, President Best Business Strategies, Shirley@BestBusinessStrategies.com 304-233-2612
Sage 50 Master Certified Consultant and Authorized Sage 50 Reseller