- Define your needs. Make a list of the things you want the software to accomplish and rank them by importance. Getting caught up in all of the hype is easy, so knowing your priorities before you get started will help keep you on track.
- Take the program for a test drive. Sign up for a free trial so you can see the system for yourself. It is probably a bad sign if you can’t ‘try it before you buy it.’
- Contact the support team. Did a real person answer your call? How long did it take for them to respond to your email? Sometimes software companies forget about the Service part of SaaS. If you can’t get technical help or answers to your questions, it does not matter if the program has all the features you need and more. The quality of service is what is really going to matter to you at the end of the day.
- Find out what kind of training is available. Does the company provide training? If so, does it cost extra? Do you have access to training as well as support during the free trial?
- Talk to people already using the system. See if anyone you know is using the system and ask the company for customer references (If they refuse, it might be a red flag – maybe no one is using the software or maybe the people using the software are unhappy.)
- Analyze the security and compliance. Is the data secure and encrypted? Who has access to your data? How often are backups performed? Can you get a copy of the backup file?
- Ask if they have a Disaster Recovery Plan. How often do they test it? Does it work?
- Read the contract. Will the price increase every few months if you don’t sign a long contract? How often is your subscription cost adjusted (whether it’s up or down) based on your usage level? Do you own the data?
The evaluation of district software for churches should take into account the various tasks performed at each level of the organization (e.g. Church, District, Regional, National, World Offices).
Capabilities of District Software:
- The ability to move a church from one regional office to another.
- Communication capabilities both within a single entity as well as between each entity throughout the organization.
- Communication is based on roles within the organization – e.g. regional secretaries versus church secretaries.
- Adding church plants or multisite campuses.
Using one software system throughout the organization helps simplify day-to-day operations
If the software is capable of handling data for individual churches as well as multi-site organizations, users do not have to learn more than one system and data entry is more consistent. The use of a single system throughout the district also allows each church to uniquely structure its own chart of accounts, contribution funds, etc. while allowing the district office to combine the data from each church into one consolidated report.
For example, a district office could collect the membership data from each individual church and consolidate it into one report to analyze the organization as a whole. An individual church would also be able to track several youth or memorial funds that would show as one youth or memorial fund total on the district office reports. The ability to customize separate structures for both levels is crucial.
Why is all this important?
First, the software needs to tackle head-on the various issues each entity is facing at their respective levels. Having one system reduces errors in reporting, ensures a high level of data integrity, increases speed in data gathering, and prevents the users from having to learn and manage five different systems.
We will use an orchestra to illustrate this concept: if each musician was playing a different musical composition would you expect a well-tuned concert? Certainly not – all the musicians have to be on the same page of the same song. The same is true when it comes to the technology used in churches and throughout the entire organization – shouldn’t the same software be used so your ministry can operate in-sync like an orchestra?
Second, providing data to the district office gives an early indication if certain churches will need help financially or within their ministry staff. It can help to determine which entities are flourishing with donations or declining. Is attendance increasing at one location but not the other? All of these and many more questions are answered objectively with the right software in place.
Third, with a one-system approach, confidentiality across the platform is essential so one church cannot view another church’s records. The system must also allow churches to opt out of sending data to the district office. Most district software packages fail in one or more of these areas: membership, financials, data gathering and confidentiality. But you can rest assured because there is an answer for district offices → IconCMO+ software!
Church office software has various shapes and sizes. It is appropriate to distinguish between “church software” and “church office software”.
“Church Software” – is any type of computer software specifically designed for use by a church”. Church software can encompass different types of software such as: bible verse, media production, donation, accounting, mass emailing, sermon, worship, and music software.
Church Office Software is one of the sub types of church software. Typically, the secretaries and financial staff use it in the office. Examples of this type of software are membership, contribution, accounting, newsletter generation, office communication tools, word processing, and spreadsheet software. The software is the heartbeat of the organization. For example, churches can still do their mission if they did not have music or media production software. Conversely, if they do not pay their bills or record donations the church doors will not be open too long.
Church office software is so vital to the mission of the church in keeping it running and the doors open, would it not be beneficial to ensure you choose one that fits your organization and still obeys government guidelines (e.g. IRS, FASB, etc). If the church could choose one thing to be correct within their organization what would it be? Most churches would choose to have the financial books correct. After all, if the church sings the wrong song on a Sunday the IRS won’t be there on a Monday issuing a violation.
Most churches realize the importance of correct financial books; however this area of ministry comes second to all the other activities in the church. When reviewing software, churches focus on the integration of membership or building a community. While these are important, they will not keep the organization out of trouble like having correct financial records. Choosing software that keeps you in check with government agencies first while building a community is the best way to start looking at software packages. It is safe to say that if the software does not have accounting included it is not worth looking at as a complete Church Office Software.
Churches some times fall into the trap of software longevity. Icon Systems can honestly say a company’s longevity in the market is not a good indicator of following the guidelines for financial reporting. If the church is unsure we recommend they do their due diligence and investigate the financial reporting requirements. A good start is to review the blog about “Fund Accounting Methods Compared“. The post discusses scenarios of incorrect guidelines according to FASB that are used in the church software industry.
While all church software is important, if certain software is not used the organization can suffer dire consequences. An organization can lose their tax-exempt status when audited with incorrect financial statements according to the FASB guidelines. Whenever there is uncertainty about proper financial reporting of money within a church, distrust spreads within the organization’s members. An organization using a FASB compliant system like IconCMO cloud base solution can be assured they are within guidelines.
Legacy System defined:
An old technology, computer system, or application program that continues to be used, typically because it still functions for the users’ needs, even though newer technology or more efficient methods of performing a task are now available. (Wikipedia)
System that has been in existence for a long time and that continues to be used to avoid the high cost of replacing or redesigning them. (Pearson Education)
Most legacy systems use client/server architecture. This means the program has to be installed on each computer and a local server is needed to network the software and data. Hiring an outside IT person to manage the network is typically necessary.
We’re not trying to give Legacy Systems a bad reputation…
Legacy systems are often times great programs that still achieve what they were designed to do. Many Icon Systems customers still use our legacy system, Revelations. And there is absolutely nothing wrong with that. If you currently use a legacy system, just be aware of fresher technological improvements; they may be able to accomplish the same tasks more efficiently – which will save you time and money. Again, we don’t want to discourage you from purchasing a legacy system such as Revelations because it really is a great program and continues to effectively meet the needs of many churches. We just want to make sure you weigh your options carefully when choosing a legacy system for your church management software because it is a long-term investment.
Definition of SaaS:
Software as a Service (SaaS) is software that is rented rather than purchased. Instead of buying software and paying for periodic upgrades, SaaS is subscription-based, and all upgrades are provided during the term of the subscription. When the subscription period expires, the software is no longer valid.
SaaS can be implemented with local applications that expire after a certain time, but it is ideally suited for cloud computing in the Internet and Web browser-based applications, which can run in any desktop or mobile device, no matter the operating system. In this model, the applications are maintained in the service provider’s datacenter, and every time users launch their browsers and log on, they get the latest version. In addition, the data can also be stored in the provider’s datacenter.
This approach has been touted as the wave of the future, many believing that local applications will be history down the road. However, legacy architectures tend to last longer than expected, and the road could be long. (PCMag)
Church Management Software as a Service
The popularity of using the SaaS concept with web-based applications has grown due to the increased availability of broadband internet access. Paying a monthly or annual subscription allows you to access your data anytime, anywhere you have internet access while letting someone else host the software, install updates and enhancements, store and safeguard your data, perform backups, and deal with any outages.
SaaS is like living in an apartment: you pay rent each month based on how much space you occupy (e.g. a three-bedroom apartment would cost more than a studio.) The management company is responsible for resolving any problems such as when the heat stops working or if the appliances need to be updated. And if you decide to move, you can take all of your furnishings and belongings (church’s data) with you.
Many churches are quickly adapting this concept because they can spend less time and money on Information Technology (IT) while getting immediate access to the latest technological innovations. Also, the financial risk you take is lowered significantly; instead paying the hefty license fee associated with traditional software upfront, you only pay for what you use and the subscription fee can easily be incorporated into your budget. And if, for some reason, the software is no longer meeting the needs of your church – you can take your data with you. For more information, read our post on security and data storage.
Now you can understand technical mumbo-jumbo without getting an IT degree
Every industry has a set of unique words, expressions, and acronyms that sound like gibberish to outsiders. (For example, the above sub-heading uses IT as an acronym for Information Technology.) Understanding the marketing puffery and technical jargon used in the church software industry without an experienced IT guru handy can be likened to visiting a foreign country without knowing how to speak the local language. This is a series of installments defining terms used in the church software and non-profit accounting industries.
Church Bookkeeping Software vs. Church Accounting Software
Is there a difference between bookkeeping and accounting? If so, what is it?
The systematic recording of financial aspects of business transactions in appropriate books of account.
The practice and body of knowledge concerned primarily with:
1. Methods for recording transactions
2. Keeping financial records
3. Performing internal audits
4. Reporting and analyzing financial information to the management
5. Advising on taxation matters
It is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information. It reveals profit or loss for a given period, and the value and nature of a firm’s assets, liabilities and owners’ equity.
Accounting provides information on:
1. The resources available to a firm
2. The means employed to finance those resources
3. The results achieved through their use
From the lengthy definition, it is obvious that accounting is somewhat more complex than bookkeeping. Basically, bookkeeping is the tedious task of entering the amounts and dates of revenue and expense transactions (i.e. contributions and purchases). Accounting is the bigger picture: an accounting system uses the bookkeeping information to create reports that can be used by decision-makers and for tax purposes.
Most church software applications accurately handle the bookkeeping part: tracking member donations and spending, even the printing or emailing contribution statements to members and generate giving total reports. Unfortunately, many of these applications fall short when it comes to the most important aspects of having accurate accounting records and providing the reports required by the Financial Accounting Standards Board. For more details, please read our post Fund Accounting Methods Compared.
All businesses, for profit or not, need accurate bookkeeping software to avoid negative consequences (e.g. fines, damaged reputation, having to close the business). These repercussions tend to be magnified for nonprofit organizations; they face losing their tax-exempt status, and the loss of credibility can prove to be devastating since the general public tends to hold churches and nonprofits to higher standards.
Icon Systems understands the value of accounting standards, and we make every effort possible to provide you with the tools necessary to ensure your church is in compliance with FASB guidelines. We even hired an outside CPA firm to certify our software, IconCMO, meets these standards!
Many denominations require individual churches to report specific information to a regional or national office.
The head offices need the ability to generate member, contribution, and accounting reports for each individual church as well as the entire organization. The headquarters for the denomination are interested in the statistical tracking of the membership and financial health of the organization. Compiling information across the entire denomination can be tricky. For example, each church may have its own set of contribution funds or campaigns. The reporting for the district office itself is also different from that of a regular church; since the main office does not typically hold worship services, it has no need to track attendance.
IconCMO+ includes denomination-specific features for congregational reporting. Denominations can pull data from their churches like membership status and special date totals (e.g. births, baptisms, marriages). Using IconCMO under the IconCMO+ platform, each church can send a more detailed report to the denominational office that lists ethnic origin, member transfers, lost members, and attendance totals.
The IconCMO+ platform was developed by Icon Systems in 2006 to meet the unique needs of regional and national denominational church offices.
Using a cloud-based church management system gives denominational offices the ability to instantly communicate across the organization. All of the information is updated in real time so church leaders always have access to up-to-date figures. This denominational software package includes a fund accounting system to ensure each church complies with guidelines set by the Financial Accounting Standards Board (FASB).
The easy-to-understand reports, graphs, and charts offered by IconCMO+ help denominational offices make informed decisions, ensuring the district is run as effectively and efficiently as possible.
Here are just a few ways you can put this denominational software solution to use:
- Track and forecast revenues and expenses
- View a snapshot of the organization’s overall financial health
- Create a visual representation of weekly giving averages
- Monitor attendance for individual churches as well as the entire district
- Assess statistical information for both active members and visitors
- Find out the number of new marriages, baptisms, confirmations, etc.
- How well are certain mission campaigns doing
IconCMO+ also accommodates the specific needs of multi-site organizations, church plants, sister churches, and even mergers.
When churches are looking for church donation software, they should make a list of the specific functionality they want immediately. Additionally, what needs exist in the next 5-10 years for the church donation software? Smaller organizations and church plants may not be ready for online donations however; the availability of this option later is crucial.
Entry of Data – Technology has helped contribution entry in various ways to get data into church donation software. Church donation software should include manual data entry, data file upload, and the ability to update donors records for online and EFT donations seamlessly. Additionally, mistakes happen and contribution corrections should be easy to make. The process should allow you to modify the giving date, fund assignment, check/cash tracking, comments, amount, or remove the transaction completely. Integration into the church accounting module from contributions removes additional key entry mistakes and time for double entering during posting.
Pledging – Pledge tracking by fund(s) is an important way for the church to know how much can they expect to come into the organization. Pledging can tell churches when people are falling behind throughout the year. It can also advise overall how much donations are ahead or short of the total pledge for the year. Pledging on multiple year funds with various donor commitment date ranges is essential.
IRS Statements – Entering data is useless if the system cannot provide an IRS statement for donors. Churches should be able to print or email statements, with the later saving on postage. Other options on statements include the pledge amount, church logo, different formatting styles, a personal message and comments. Criteria for producing the statement can vary such as: status codes, date range, sort options, funds to include, people that have given, non givers, people that have pledged but have not given, etc.
Tax Type Categories – Tax Exempt, Taxable or IRA, should categorize all the funds to allow removal of certain fund during IRS statement preparation. The organization should be able to add or change the fund names at any time but still maintain the category. A taxable fund example is money collected for coffee or donuts on a Sunday. A tax-exempt fund is money given with no return of good or services and donors expect a donation statement. Additionally, the IRA contribution is when someone donates his or her IRA proceeds to the organization.
Church donation software is an important aspect to any church and should have the most streamlined processes in place. It should also include some of the basic concepts above for starters and additional features like a link to an acceptable fund accounting package. Additional features include transferring monies from one envelope to another, ability to change envelope numbers, print deposit slips, and create reoccurring batches. Icon Systems’ IconCMO can help churches with this process and we look forward to hearing any comments you may have on this topic.
Church Payroll Software Cost and its Benefits
One option for churches is to outsource payroll responsibilities. Payroll services typically charge $1 or more per check, with a minimum fee of $10-25 each pay period. Additional fees are often incurred for quarterly reports and W-2 preparation. These fees can amount to a substantial number over time.
Another option is for the church to purchase payroll software, which usually requires annual upgrades. These upgrades are not only expensive, but the installation process also consumes your valuable time.
The Icon Systems payroll module provides you with an unlimited number of paychecks and pay periods for any number of employees for only $110 a year. Since the system is entirely web-based, upgrades are automatic and cost you nothing extra. Additionally, the web based capability allows payroll checks to be prepared offsite but printed on location for the staff.
Price should not be the only factor considered when choosing a payroll system. The benefits of using the right church payroll software are numerous; however, we summarized the most important ones here.
- Confidentiality – Church payroll software needs to be password-protected so only authorized people have access to this confidential information. You can have volunteers and staff members use the system to enter contributions and even process accounts payable checks without making sensitive payroll figures available.
- Accuracy– The importance of accuracy in any church payroll system cannot be overemphasized. Not only do employees rely on the church to calculate paychecks correctly, but reports created for the IRS and other government entities also need to be accurate. Issues concerning pay tend to quickly dissolve trust in any organization, not to mention inaccurate reporting to the government could result in heavy fines.
- Integration – Using separate church payroll software requires you to summarize the information and record the journal entries in the accounting system. Since the IconCMO Payroll module links directly to the fund accounting records, you are able to allocate staff pay to various funds as well as obtain up-to-date, detailed reports that comply with guidelines set by the Financial Accounting Standards Board (FASB.)
- Reliability – Icon Systems has been in the business of helping churches for the past 20 years and its certified church accounting software follows the FAS 95 and 117 guidelines. Since you trust Icon Systems to take care of your organization’s accounting needs, it makes sense to turn to us for your payroll needs also.
We hope you have enjoyed reading this two-part series about church payroll software – if you missed the first post, you can read it here.