Tuesday, November 13, 2018
Hey Fletch … We are considering outsourcing our financial roles. Any insight on this? Pros / Cons?
DRF—I answered a related question on August 29, 2018 in “Would We Save Money by Outsourcing Cleaning?” The principles are the same for outsourcing financial services as to cleaning services—cost, security and savings. The risk is similar. In the one case you are handing over the keys to your church; in the other, you are handing over the keys to your bank accounts.
My friends at Churchwest Insurance Services, headed by Charlie Cutler, have a good article on this topic.
Look at the salary and benefits to have a person or team handle your finances in-house. This easily runs from $50,000 to $150,000. Add in other costs of the team, such as equipment, overhead and insurance.
Get three bids from outsource firms. Ensure that the firms have the highest caliber of leaders and proven integrity. Compare the costs. Then compare the “ease of use.” Will regular activities like cutting checks and getting reports work for you with an outsourced firm? You will still need a team to count and deposit the offering, unless you use a bank to do that (for a fee).
I know of one firm that handles outsourced financials, Empower Consulting. I like that this firm has partnered with the Evangelical Council for Financial Accountability (ECFA). Let me ask their president, Justin Spicer, for his comments.
Justin—When outsourcing, I would evaluate:
- Church Experience—What kind of direct experience does the firm leadership have in local church financial leadership (from a staff and/or elder leadership level), including a deep understanding of the “language of church.”
- Client Profile—Does the firm have a focus on serving churches, or is it a side segment of their client base? Are the churches they serve of a similar size and stage?
- Technology—Do they use the latest technology (cloud-based software, paperless accounting, mobile apps) and do they integrate with the ecosystem of software your church is already using?
- The True Value Add—Consider not only how much time it will save, but how much additional high-level expertise can you gain from outsourcing. I would argue you want to find not only a bookkeeper but strategic partner in your ministry.
- References—Contact several current client references to hear about their experience working with the firm. Make sure they are similar in size and stage to your church.
- Cost—Does the upfront and monthly cost make sense from a cost savings perspective (saving staff wages or reallocating current staff), and your current budget? As you grow, the price will increase, so are you willing to absorb that into your operating budget?