Establish an Expense Reduction Team and Help Your Church Budget

Save Your Church Money Blog

Expense Reduction Team

Please consider establishing an Expense Reduction Team to review all service contracts and non salary expenses in an effort to save your church money.  Your church may be blessed with members that have experience in negotiating service contracts, property management and in reducing expenses.  This team should also ask the church staff for suggestions on areas they believe the church may be able to save money.  Review every expense carefully for items that may be eliminated or reduced.  In some cases the silver service plan may save a little money and provide good enough service compared to the platinum or gold service plan.  The team should be careful not to save money in the short run where it will cost the church more in the long run by reducing the life of the item being serviced.  Also, look for overlap in service agreements or service agreements that are rarely used where the church may be better off to pay for maintenance when needed.  When considering eliminating a service contract please look at how critical it would be if the item fails and may take a little longer to repair because there is not a service agreement in place.  For example many churches do not carry maintenance agreements on computer monitors because it is more cost effective to replace them as they fail and it is inexpensive to keep a spare on hand.  Consider capping the amount that is reimbursed for cell phones and take a look at whether changing to a different cell phone plan will save the church money.  Ask the staff to carefully review all expenses and to look for ways to save the church money.

Reserve For Large Ticket Items

Most churches have large ticket items that have an estimated useful life.  I suggest that your church reserve for future large tickets expenses such as new HVAC units, parking lot overlays and roof replacements.  If possible, place some line items in the annual operating budget to build this reserve to replace large ticket items so that the church has the funds reserved when a large ticket item needs to be replaced.  A system of internal controls needs to be in place to make sure that expenditures from the reserve fund are authorized and proper.

Watch the Church Budget

There should also be accountability to make sure spending is in line with the church budget.  This should be monitored on a monthly basis and a system of internal controls should require each staff member to follow their budget and obtain approval from the appropriate person or committee before spending above or outside of budgeted amounts.

Any suggestions that you have on this post are welcome as they may help to save a church money.