Church board members are charged with fiscal oversight of the church coffers. But not every board member or finance committee member is a CPA and schooled in finance. Many treasurers and bookkeepers make the mistake of providing too much information and detail to board members. This only muddies the waters and leaves your committee members feeling less equipped to make good decisions. In order to get an accurate picture of the church's financial standing and make good decisions based on this information, your church board and finance committee need the right information presented in the right way.

The single-most important report you can bring into a finance meeting is the cash availability report.

Cash availability = cash - current payables - temporarily restricted funds

Available cash represents the real money on hand now for the church to work with. Many churches today find that senior management (pastoral staff) and the governing board want to know how much cash the church has. The most important question is not "how much money do we have?" It's "how much can we spend?" Typically, these two are very different answers.

A cash availability report factors in the immediate (i.e. less than 10 days) requirements related to cash to tell others what money is available to spend. It is a simple report that you can generate on a spreadsheet and provide on a monthly basis with other reports that you prepare. Here's an example:

While temporarily restricted net assets are not a legal liability or obligation of the church, the funds are not to be expended for general operations purposes and are excluded from the cash balance for that reason. Some churches have in essence "borrowed" from temporarily restricted because they overspent from operations. This report will help you avoid these types of issues.

You will notice in this example that the cash balance was $750,000. However, the available cash was only $190,000. Significantly different decisions will be made based on the two numbers. Providing this information to the decision-makers in your church is crucial.

Churches can utilize a variety of ratios and reports to get an accurate picture of its financial health. The Essential Guide to Church Finances provides a chapter on Performance Measurements and highlights some of these tools.

Vonna Laue is a CPA and partner with the non-profit accounting firm Capin Crouse, and co-author of Essential Guide to Church Finances (Christianity Today, 2009).