 Okay. All right. Good morning, everyone. Welcome to our class, BC310 on church and ministry administration. Thank you for joining us. Let's take a moment and pray. And we will start. Could something please leave us in prayer. The class will start. John. Yes, let's pray. No, Jesus, we thank you for this morning. We ask for your grace to be with us as we learn. Today, God, we pray that you would speak to us and help us to all listen and understand and comprehend and also apply this in our ideal leadership life for God. You pray that you would be our master, your leader and help us to understand God. Thank you for this time. Jesus, thank you for praying. Thank you. Okay. Good morning once again. Today, we're going to get into a new chapter, another chapter on finances. I'm managing finances. We kind of introduced this topic last week. Let me go ahead and set the screen and get started. Finance, accounting, but so we said last week, as we introduced this, this is a very important area of ministry. How we manage finances, how we keep our accounting, all of that. It can make or break the ministry. You know, when we are starting out initially the early days, maybe there's not much money to manage and things are easy. You know, it's a little bit. Okay, it's fine. You can manage. But once people, for example, if you're planting and leading a church, and once people start attending the coming into the church congregation, they're giving money, then as the contributions become more and you've got so many things to pay and do, it's very because even more important to manage things properly. And people are also trusting and they're trusting the church. Basically, they're trusting us who are leading the church that we will not misuse the money, we'll not understand all those things. So all of those things matter. And if people lose trust, they feel like money is not being managed properly or money is being misused or whatever. They are going to become reluctant, hesitant to give. And it's going to impact the ministry and so on. So we want to talk about some things here about just managing money, some basic things, how we are doing it. We began with a biblical perspective, which is how do you raise money? How do you get money to do the ministry? And I just said some simple principles. First is we share the vision. We tell people this is what I feel God has called me to do. This is the vision God wants us to journey with. So you share the vision and then you let God move upon the hearts of people to give to the vision. But don't force people. Don't compare people. Just share the vision and they'll give you if God moves in there. If it's not there, then don't pressurize. Don't put pressure on people. So you have to give otherwise we had to close the church. We had to stop the ministry. We can't do anything. Just share the vision. God has called us to do this. We are going to do this. This is the vision God has given us. Those of you who want to do this, if you feel in your heart, you want to give. So that is the way the Bible also tells us. Let each man give, not out of compulsion, not grudging, but as you purpose in your heart, you give. So we should follow that same principle. Whatever you feel in your heart, you give. Secondly, our goal as ministers is we will serve people spiritually. Let them so material. That's a biblical principle that if you give into their life spiritually, they can give financial. That is perfectly fine. That is God's method. So we must focus on, I want to do a good job spiritually. Spiritually, I'll serve the people. Minister God's word, pray with them, pray for them, teach them the things of God, help them grow in their faith. Take care of them spiritually. Let them so financial. Now it is very, so the principle is you will read from where you sow. In some cases, God will let you read from where you have not sown. But the normal thing is you will read from where you sow. So if you're sowing into the lives of, let's say a congregation, they will give financial. That's the normal thing. Sometime, some strangers, you don't know anybody. They are not. You're not touched their life or you may not know anything. They will come and give financial. That is okay. That is purely what God would do. God would move in somebody's heart. You don't know them. You may not have even served them, but they come and give. Fine. That's okay. But that's like more of an exception. That is God's grace. But the normal is you sow spiritually. They will give back. And actually that's also biblical. And thirdly is where to be good stewards of the money along with spiritual things. Yes, we have been given charge of spiritual things. We are ministering God's word. But we also have to take care of the money. Take care of it. And God, Jesus spoke in that Luke 16. He said, you know, if we are not faithful in the unrighteous man, which is money, who will give to us the true riches? Will God entrust us with the true riches, the eternal things? So God is looking at how we manage money to see whether he can actually entrust us with spiritual things. There's that relation there. So we have to be good stewards of the money. We also have to be accountable to the people who have given to us. So if people have given to us, we have to be able to willing to say, hey, we are accountable to you. I remember once, some years ago, one family came and met me. And they've come from some other, they've been part of other churches. They were sharing like where the pastor would say, you know, we have to raise, we need money to, you know, for church construction, please give. So people will give. Then the thing is being constructed. Money, instead he'd take that money and he will buy a big car. He'll buy something else. And so people are wondering, hey, he said we need money for doing something, church work, or buying an instrument for the church. We have given money, but that is not happening. Where is the money going? So when they go and ask the pastor, you know, we gave money for this, but that's not happening there. So no, you cannot ask me anything. Don't ask me. So it's almost like I'm not accountable. I'm not answerable. I'm not going to answer you. And so after some time, after like a two year period, these people got really upset. They got disturbed because they saw this thing repeated. They collect money for something that won't happen, but the money is being used for something, his own thing. And then they can't even ask. They ask him, don't ask me anything. So that's a sign where the pastor was not being accountable to the people. They are the ones who are giving. So we have to live with the sense that we are answerable to the people. We have to answer. They've given it to us entrusted. And also we have to be answerable to government authorities, civic authorities, because we are operating in a country. We are part of a country. We are citizens of a country, which means if you're a citizen of the country, you follow the rules of the country in the lands. And part of it is, you know, if you're running an organization or a church, you have to give a comment to what is happening. So you follow the rules of the lands. And all of these things are the public of principles. So I just wanted to share these practical things. Before we get into what we do, I want to share some simple things here, some guidelines here. One is, especially in the early, so from the beginning, from the beginning, from the time you start the ministry, keeping proper accounts. Sometimes we think, now I'm just getting 100 rupees. Why else should bother keeping an account of this? When I'm making, you know, 100,000 rupees, maybe then I will keep accounts. No, that's not the right approach. The right approach is from the time you start from day one, keep proper accounts. So when we started APC, this was going back to 2001, I used to write in a little notebook one day. So whatever offering will come, offering we get on Sunday, I will sit so we didn't have any other person. I had to do everything. So I would sit, write in a notebook, you know, whatever the denomination was, how many numbers of that this is your offering, try to keep simple. It was very simple. It was very small. We are hardly 15, 20 less than that, less than 20 people. But the point was, I have to keep good accounts. So just one page, hardly any amount. But I will write it down, keep it. And that's how we start. In a simple notebook, I think if I go and search, those notebooks, the lines are there. But that's how we start it, you know, keep account. Then shortly after that, we registered APC as a legal trust. Then we start depositing the money into the church account. So that's the second point. Don't mix personal account and church account. These are two separate accounts. Your personal account is your personal. Church account must be a separate account in the name of the church. So whatever offering comes, it goes into the church account. So from the beginning, that's the way we follow things. The mistake many people make, especially in the early days, is that money is so little, I'll just put it in my personal account. See, if somebody gave it to you personally, of course, you can put it in your personal account. But if they gave it for church, it should be kept separate. I agree that in the beginning, the amounts will be very small. So you may not think I should open another account for these small amounts. But it is a principle. If you start right, then you can grow right. So keep these two accounts separate. Now, you know, the problem that happens is if somebody takes, you know, they collect the Sunday service offering, it may be a small amount, they go put it into their personal account. Then it's very difficult to separate. What is your personal amount? What was the amount that was actually given for the church? Because you could all go into one bank account. And you're using it as it was your first, now the pastor will use it as it was his personal money until it is completely lose track of it. And eventually, basically what usually happens is the church money is used for all the personal things. So from beginning, keep it separate. So start keeping proper accounts, keep it separate. Now, the thing we did from the beginning is, and those things, it was very small, of course, but we put everything into a software system. So this was 2001. So by that time, of course, you know, people were using computers and software systems all available. So although I would record everything in a notebook, at any expense, I'll put it in a notebook, then once a week, one accountant will come. She had very little work, hardly two hours of work. She'll come. She will enter it into the accounting system. Hardly anything. But again, the principle is important, right, that we want to maintain everything in a good way. So in India, of course, here, the software system that is used often in many small businesses, small organizations, is Tali accounting system. That's what's used in many small organizations, not big ones, they use bigger things. But Tali is good for small and big size organizations. So that's what we started using, and we're still using just that to keep it open. So from the beginning, although I would record it in a notebook, record everything in a notebook, I will give it to this person, this accountant who comes once a week, who came once a week, and she'll just put it in the system, make sure everything is right. But it's just two hours, nothing, hardly anywhere. And so that's how it starts. Then as the congregation grew and the contributions also started increasing, then I was not involved. So I slowly, I let the accountant, you handle all the work, you handle the work. I will make sure that, you know, so we started following certain principles, like every, and I just, I probably have put it down later, I'll just mention it now and I'll mention it again later. You know, every purchase must have a bill. You need to have a proof that, you know, we have spent this amount for this thing. You can't just say I spent the money and it has to have a proper bill. So from the beginning, that was what followed. If there's no bill, then we can't treat it as a real transaction. Of course, today we have the advantage that all the transactions can be done online. Like, you know, you can, you know, the invoice can come online and you can pay it online. In those days we used to collect physical bills. Give me a bill. I need a bill, I need a record to show that we have spent this money. So those are things you have to have a bill. Without a bill, that money will not be paid. We need a proof that this money is being used for this purchase. So everything, bills, we started, you know, collecting the bills. Of course, you know, by this time, we had an admin person. So it's okay, you know, you handle this. Make sure you collect all the bills. Give it to the accountant. Accountant needs all the bills. They will tell you everything, put it into the system, check everything, make sure. And just for information, I'm not saying we should learn accounting or anything. I did not learn accounting. But just as information, we should tell the people who are doing accounting to maintain a double entry bookkeeping method. Double entry. So that means all credits and all debits are followed. And this will be taken care of by the software system itself. And it's like there's an internal check. A double entry system. So all the credits, all the debits, they should match. The income, the expense, you're putting all together. And then when you look at the general ledger, that is the overall picture, you can see that everything is tallying. Everything, your income expense tallys. If there's a mistake, it will show up. Otherwise, in a general ledger, you can see, okay, everything is tallying, fine. And then, so, you know, we have the right people to do this work. I am not directly involved. There's an accountant and all that. And I mean, people will collect all the bills. So, and then afterwards, we started creating what we call as ledger heads, meaning people can, when people can give money to particular funds, like there's a general fund, so where people give time, so our friends are most there. But if somebody says, use this money for publications, then we want to make sure that money is actually used for publications. We can't take that money and use it for something else, right? So, we have to, and we still have these, we have different ledger heads, where we can track money is coming from which location, which church location, money is given to which ministry area or which project people are giving. So, then we can say, okay, this much money was given to that person, make sure it is used for that part. So, all this can be done within our, within the system. So, that's a big advantage of using a software system. It can be very easy to maintain. You just tell the accountant, hey, we are starting a new project, we are starting a new ministry. If somebody gives an offering for that ministry, it must be accounted there, keep it there. Of course, the bank account is a common bank. But all the money goes there. But in your software system, you know exactly how much of that amount belongs here, belongs here, belongs here. So, if you know and track it. Now, of course, today, a lot of transactions happen online. Meaning, I would say maybe 90% of contributions today are coming online. Only less than 10% of what we get in the Sunday morning serves as a cash offering. So, most people have become comfortable doing online transactions. So, their types are offerings. It comes online. It goes straight into the bank account. That is a very good thing because there's no human involvement there. It goes straight into the bank. Very good. Now, some people still prefer putting some money in the offering during the service. Okay. We still collect that. But that is like about, I would say maybe 10% or maybe even less. I'm just estimating. So, that's one thing. But now, at least the way we do it in India is we do not track who is giving the money. We don't need to. The government doesn't require us to do that. In some other countries, for example, in the US, they will track who is giving the money because they need to give a tax that they will receive to that individual and they can play in tax reduction. So, they will, most of the time, they will track who is giving the money. Us here, we don't know. So, the money is going directly in the account. We don't know necessarily. We can, in some cases, we can see the name of the people. But generally, we don't track it. We don't say how much this person gave. We don't track it. And we don't want to know. We just let the accountant handle all that. That's not needed. So, just to repeat, from the beginning, keep accounts. Especially when you're starting a ministry, don't neglect it because even if the ministry is small, as a principle, we should keep trying to use the software system. It makes everything easy. And have the right people to help you take care of this. So, let's talk about a little bit about, let me pause any questions from anyone at this point. What is this? The software system. The second one is a free open source software. So, we can download it and use it. So, Tali is a licensed one. But actually, the Tali license also is quite cheap. Now, I don't know what the cost of the license is today, but I think it must be $50,000 or less to get one machine license. $2,000 or less. I don't know the exact cost today. Like when we bought it, most days it was $25,000. That was in 2001. One USA license was upgraded. But it's not very expensive. You just need one computer, one user license. They give you a license per machine. And that's all you need. Because all your accounting can be kept in one computer. It's only the account that you have access to. And then you backup the data, keep backups of it somewhere. But you just need one user license. These two are free. You can just download and use it. So, just give both options. So, let's just talk about our accounting system here. Let's get into some details. So, like I said, in the very beginning, when we started for our initial period, we had just one external accountant who would come. Oh, let me share that. Sorry, I had to share this. All right. So, in the beginning, I'm going back to 2001 when we started, we had just one external accountant come. And like I said, this lady would come just for maybe two hours in the week. Basically her job is to put everything into the system, take the bank account, everything is fine. So, she had full access to everything, the software system, to our bank account, to all the bills, everything. So, she would come put it in, but work was very little. Not much. Then, as things are growing, that means now we had more transactions, more money coming in, more money going out. So, her work increased. So, basically this external accountant came from an external accounting firm. We did not have our own accountant. She came from an external accounting firm. So, we only paid for their work. Like we had a fixed income. This person is definitely two hours a week. That's all people pay. So, it is easy. We don't have to worry about anything else. The work increased. We were coming in, transferring our increased, all the other expenses increasing. So, then we moved to, okay, this person will come half a day, four hours a week to do all the work. So, as the transactions began to increase and the work was increasing, we also increased the hours by this accountant. We paid a little bit more, but again it was easy, meaning external accountant, she came only for the required number of hours, did the work, went away. We had no problem. And our responsibility is to keep all the records, all the bills, collect all the bills, keep it ready so that when she came, she can just do her work very quickly, check everything. Then once a month, they will give us a report. So, every month, we continue with, even now, at the end of every month, before the 7th of the next month, I will get two Excel sheets as a report. Actually, two Excel sheets, but there's a lot of information inside. One is what we call as a income expense report, which means for the previous month, what was the total income, where it came from, so we track every location and what came online. Nowadays, because everything is online, we can't track which location, because people are from everywhere. But at least what came online, what came through the cash offerings, all that. The full details are there. Income expenses, what are all the expenses? By the headings, these are all the expenses. So, income expense report. So, I can quickly see, what happened last month. Everything is okay. So, I'll just open it. I'll look at it very quickly. If there are anything, that is not correct, I will ask questions. So, and then there is the receipts. It's almost like a similar to income expense, but it's like a double, let's just say, all the receipts, all the amount that we received and so on. So, we have two of these reports, which I will look at. And in that report also we track a lot of other things. For example, we track month by month over the last 10 years, what has been happening. So, I can open a sheet, I can go back over 10 years, every month, what was the income, what was the expense. So, if I want to, and I can see on that scene, example, we are in October, September, last month, September, September 2023, what was the income, what was the expense? I can compare across the years. So, September 2022, income expense, you know, 21, 20, 2019. So, I can just visually look and I'd say, okay, because what happens is we can observe trends in giving. Certain months in the year, the offerings would be more or it would go down or our expense would go up, sometimes there are months where our expense would be more than the income. And then I know, I know why, because suppose we print more books, then I know that particular month we spent moment only on printing books, so our expense went over our income. So, okay, nothing to be afraid, you know, it was a known expense, we know what happened, or if we had a big conference or something, our expense went more than the income. Okay, so I can look at the whole overall picture across the years, I get a quick understanding okay, things are fine. So, these reports, I don't spend too much time, I just have a quick look. The work is done by the account. My job is, make sure everything is okay. If there is something wrong, I have to ask the question. I'm not going into all the details, the details are being taken care of by the accountants. The reports help me see where things are. If something has gone wrong, should we take corrective action, those kinds of things. If our expense is more, I'm not sure why, I go to the income expense report. I can look there, oh, this month, this was what was the expense, okay, fine, so I can look at these things. So, the accountants started working with us. Monthly reports, as I mentioned, and then we have, we do audits. Audits means, another person doing the job. So, we do audits once every initially, there was a time we should do every three months, now we've kept it to every six months, at least twice a year. So, let me just say every six months, we used to do every quarter, every six months there will be an audit, an external person will come that is different from this accountant who will come and check everything and say, they check all the previous months, everything is okay, anything wrong, so they will highlight. So, you're checking it. So, you do every six months and then at the end of the year, at the end of the financial year everything has to be checked one more time and a financial report has to be made and that is published on our church website, of course, and things that reports are given to the government and all that stuff. So, we do two audits plus this financial year check. And so again, these were done by our external people. Then after some time and let me recall this year 20 I think it was I think it was 2018 or something somewhere around that, I forget the exact year. We felt that the work has increased so much we need to have an internal accountant full time. So, you can see like it was almost more than 15 years after we started that we actually hired a full time internal accountant. Till then we're just using the external so then we felt okay the work inside is getting a lot sorry, I need to move back. I think maybe in 2016 we hired an internal person part time. So, our own accountants who had time was divided between administration and accounting. The accounting part is mainly to collect all the bills, collect everything, keep it ready and the external accountant will come. So, we made that and then eventually at some point we said even that work is getting a lot. So, we need a full time so I think the full time accountant came in 2018 or something. So, we had an internal accountant the external accountant would continue to come every week. So, right now what happens is we have a full time internal accountant she's a full time internal accountant she handles everything enter it into our system then there's an external auditor who comes again I'm not right now we're doing it once in six months but the auditor will come check everything the monthly reports keep coming, the monthly reports are sent by the external accountant who sends the reports external auditor checks then once a year there is a big total check and report and say and give it So, it's a lot more people involved right now but it is important to just go to make sure that everything is and then once a year I mean are the auditors or the accountant can talk to me they will in touch with me by email every week there's a lot of communication happening but once a year we all sit down together so we actually did it yesterday so yesterday our external auditor came internal accountant external accountant we all sat together they will give reports okay this is where things are we have to be careful of this we have to be careful of that because they will inform me about change in the government rules so they said see the government has made these changes you need to be careful of how you're doing this and how you're doing that you need to change this and also that discussion happened yesterday so once a year at least a lot of things happen on email throughout the year but this will be like an in-person meeting they have checked everything they've done their audit then they'll come and give a report what we should do differently so the reason is we don't want to get into any trouble right we want to make sure we're following the rules and if the government changes the rules we have to follow the new rules and make sure everything is being done properly so that also happens that's a lot of responsibility in terms of taking care of making sure finances are going properly everything is in order now let's get into a little bit more detail on what happens in the accounting of church money we follow a two-person rule that means everywhere at least two people must be involved when money is being handled if you have a few more people it's better but generally you need two people involved there shouldn't be one person just deciding so example when we are counting the offering in church right it will always be in a group of people so one person is not going to sit and count maybe in the very first few weeks I was the only person sitting and counting it's okay but at some point we changed we had an offering counting team that there will be more than at least two people preferably three or four people who will sit in a group and count the offering and it has to be recorded in the book right there in front of everybody with the money you're counting so this is cash in the bank not a problem no human involvement but this is cash so when cash is involved we are going to have two or more people sitting and counting they will count the money then it has to be written in the notebook signed by at least two people that this is what we have to whatever envelopes people have used in counting money it's all put together everything and it is sent to the church office and it should be the church office by monday so sunday's offering monday everything comes to the church office in the church office there's another check right so in the church office our accountant everything reaches by monday Tuesday she would check everything and of course we use a machine to count put in the machine check everything is fine then it has to go to the bank so Tuesday it is deposited in the bank and the bank receives must match what was given from the sunday offering so there's a offering check there's a counting check right there on sunday there's a check in the church office we use a machine for it everything is checked and the third thing is in the bank when it is deposited all these three numbers should be the same so then we know that the money that was collected on sunday actually went into the bank on Tuesday cash and there are three checks happening so when that is done our internal accountant keeps all the records that week external accountant comes and he checks everything fine so two people more than two people we have checked everything now this is our process which we have followed from a long time very long time ago we started following this but let me tell you that there was a time when somebody found a way to cheat this system so what happened this happened some years ago so somebody had put I don't know if I shared this story with you so please forgive me if I shared this story I shared about the 50,000 rupees so somebody had put 50,000 and this lady was taking money she left after that so somehow she managed to take money out of it they were sitting in a group even though they were sitting in a group she found a way to take money out but she was exposed and we called her she left so even though we tried to be as tight as possible somebody found a way to steal money but thank God it was exposed and we were able to address it so the fact that today people are doing contributions online is actually a very good thing we are trying to avoid people giving physical money because there is a possibility we don't know even though we have kept everything tight the cash somebody can just take the cash that's a problem anyway so that was a procedure that we have been following we continue to follow with other receipts and offerings and contributions now contribution acknowledges let me say this and then we will go for a break we do not give receipts to people for every contribution because we don't know who is giving, we don't record the names but there are people who send an email and say I have sent so much money please confirm so then we are going to handle this then she will check the account okay we have received the money then she will send an acknowledgement that thank you so much we have received your contribution so we don't do it for everybody only for those who send an email they say I have sent this money please confirm we will check but not everybody does that there are a few people who would do that but not all right I will get into the other details because any questions here before we go for another break on finance accounting in the church, in the ministry I am also regarding the offering accounting so should it be in a very public space or it can be in a little isolated space even if they have two people or three people because the public space might be a little noisy for them so that is our yeah we try to keep it in an open space meaning other people can also see like if they are walking around but at the same time like you are saying it should be comfortable enough for people to talk and you know that way so I think either way is okay if it is a closed room that's fine as long as in that room there are four or five people who are working together so they are folding each other accountable I think wrong can happen so if it is a closed room also it is fine of course because we are in an auditorium and we just tell people you sit in the corner of the auditorium and you do your accounting here finish it up that is fine so I think either way is fine as long as people are trustworthy and they will take care of the CCTV cameras can be there as well I guess so to answer your question either way is fine just because we are meeting in auditorium and there is no closed room available right next door we just let them found in a corner but if there was a closed room then I would definitely encourage them to go to the room but go together and it should not be open until everybody is present so that everything is done as a group the danger in having a closed room is if one person goes in before the others and that person opens the offering other people are not there so that's the danger of having a closed room so when you are using a closed room you also have to have these additional rules that only after all the four or two people come in it should be open and the danger is if you are having only two people if the two people are in agreement that we will take some money and we will share it in us again that's a danger we have to think of that prevent that from happening so that's why it's always nice to have an open space where others are others can generally just see what's going on and even if two people are there there is no temptation that they collude on taking money away from the offering sorry it looks very messy but thanks okay let's go for a break we'll come back in 10 minutes thank you