Important: CPA-prepared Financial Statements

'What's Best For The Church?' Have a Certified Public Accountant prepare annual financial statements on the church, for both your internal management of the ministry and for when you request a credit arrangement.

There is a uniform, widely recognized format of an organization's financial statements called Generally Accepted Accounting Principles.

According to Wikipedia, the online free encyclopedia, 'Generally Accepted Accounting Principles (GAAP) is the standard framework of guidelines for financial accounting. It includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements. Financial accounting information must be assembled and reported objectively. Third-parties who must rely on such information have a right to be assured that the data are free from bias and inconsistency, whether deliberate or not. For this reason, financial accounting relies on certain standards or guides that are called "General Accepted Accounting Principles" (GAAP). In any report of financial statements (audit, compilation, review, etc.), the preparer/auditor/CPA must indicate to the reader whether or not the information contained within the statements complies with GAAP.'

I highly recommend having a CPA do your church's annual financial statements, to give you the best tools to manage the business of the ministry.

Practically speaking, and this may change from one financing source to the next, church lenders may accept non-GAAP (the church's internally generated financial records) for financing of $500,000 and under. From $500,000 to $1 million, they may or may not want GAAP. For financing over $1 million, expect financing sources to request GAAP financial statements as part of their decision to provide the credit. This can vary based on the amount of credit related to the church's income.