Does church accounting software differ from business accounting software?

In addition to a number of popular small business accounting products, there are dedicated church accounting software systems that work for many churches. While searching for free church accounting software remember that the accounting needs of a nonprofit such as a church differ significantly from those of a for profit company.

Churches and other nonprofits differ significantly from businesses in that they use a special style of accounting called fund accounting. It is quite important for churches to utilize this specific type of accounting for their books. The difference with this form of nonprofit accounting is that is looks at assets and liabilities based on their intended ultimate purpose.

By using this form of accounting churches can draw a distinction between unrestricted general funds and those that are restricted for a specific purpose such as feeding the poor in your community. Although is is important for any organization to use an accounting program that provides a clear audit trail, differing tax requirements will create much different needs as to how data is grouped and collected.

Might church accounting software that is free work for your congregation?

A basic general business accounting package may be all that a small church needs. But one drawback to a bare bones system is that it might be easy to make improper changes in the records. If this were to happen, with no clear audit trail, it could be a real problem to find out exactly what happened.

An additional issue when using accounting software intended for businesses is that there will not be any ability to track attendance or giving without using an additional free standing program intended for these purposes. Free church accounting software may not be suitable for churches that are larger due to more complicated management and accounting needs. If the free options do not seem suitable at least some of the versions for sale are reasonably priced.

It would be wonderful if more church accounting software would be made available at little or no cost, especially for those congregations that are just getting started. Some of the software vendors have reduced the price or given software to small congregations so it would certainly not hurt to ask.