The Chart of Accounts is a list of all the Balance Sheet and Income Statement accounts for your church. It’s a comprehensive list of all possible accounts from which you can record financial transactions.

Put another way, every donation and every expense will be recorded to one or more of the account names listed in the Chart of Accounts.

The Balance Sheet is a statement of all of the assets and liabilities (including equity) of the organization at a particular date, such as the end of a period. This is contrary to an Income Statement, also known as a Profit and Loss Statement (“P&L”), which records revenue and expenses over a specified period of time.

The Chart of Accounts should be subdivided into the following sections:

Assets—Includes the subaccounts Cash and Accounts Receivable.

Liabilities—Includes the subaccounts Accounts Payable and Notes Payable.

Revenue—Includes the subaccounts Donations-Worship Service, Donations-Mail, and Fundraising.

Expenses—Includes the expense departments. For example: Lead Pastor’s Office, Administration, Service Programming, Family Ministry, Group Life, Resources, Capital Expenditures, etc. These subaccounts are broken down into further subaccounts.

We encourage you to assign and use account numbers for each account name because many of the subaccounts in the expenses section have the same name as those in other expense departments.

If you have limited or no accounting background, don’t let this overwhelm you. It’s not as complicated as it looks, and we can help you!

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