The end of the year is full of a certain busyness that you don’t see at any other time. With the combination of the holiday season and the myriad of tasks you need to accomplish to be ready for January 1st, it can be challenging to ensure you get everything done.
Using this checklist as a guide, you can ensure that you’ve completed everything on your to-do list and have set your church up for success in the new year.
1) Prepare 1099s
Any contractor, freelancer, guest speaker, musician, or other non-staff member whom your ministry paid more than $600 for work done during the calendar year requires a 1099 form.
There are different versions of the 1099 form based on the type of work performed, so you need to review the requirements for each one and determine how each contractor should be categorized.
You should also have a W-9 on file for each payee, which provides their tax ID number and classification status. This form will also indicate whether a contractor is an incorporated business, meaning they don’t need a 1099 submitted for them.
All 1099 forms, plus the 1096 form that lists out all of your 1099s, should be submitted to the IRS by January 31st.
If you have an accountant or bookkeeper, they can help you prepare all of these documents and submit the right forms to the right people. If you use a church management software like Realm, your system may also be capable of generating the forms for you through your accounting tools.
2) Review W-4s for Staff
You should have a W-4 form on file for all staff members, regardless of whether they’re full-time or part-time.
This form specifies the correct amount your church should be withholding from your staff’s paychecks for their federal income taxes.
Ideally, these forms should be reviewed annually to ensure that you and your staff don’t inadvertently withhold incorrect amounts, which could result in unexpected tax bills or penalties.
3) Reconcile All Accounts
Reconciling accounts can be a time-consuming process, but if you’re using reliable accounting tools throughout the year, you’ll have a much easier time verifying all of your data when the time comes.
It is absolutely essential that you go through the process to reconcile your accounts, investigate and correct any discrepancies, and verify that all of your financial data is correct at the end of each year.
Taking the time to reconcile your accounts accurately will help ensure compliance with all state and federal year-end regulations and protect you from financial mismanagement or misconduct.
4) Review Vendor Contracts
Reviewing vendor contracts at the end of each year is part of being a good steward of your ministry’s resources.
Each vendor providing a service to your church (including outsourced IT, software management, bookkeeping, and building maintenance) should have a contract specifying what they’ve committed to doing and what you expect.
By reviewing these contracts each year, you’re ensuring that your church is spending its money wisely on contractors who provide the services they’ve agreed to at the quality and timeline you expect.
Go over any changes you anticipate for the coming year, request updated W-9 forms, and verify that each vendor is the right one to complete the work you’ve asked them to do.
5) Follow Year-End Payroll Procedures
Even if you outsource your payroll process, there are specific things you need to do to complete your year-end payroll procedures.
You’ll need to submit the final payroll run for the year, verify all of your staff members’ information, prepare W-2 and W-3 forms, submit any quarterly or year-end forms required by state or federal law that haven’t been completed yet, and reconcile your payroll with the rest of your accounts.
Outsourcing your payroll or using a payroll software system will help simplify the process, allowing you to focus on other items on your year-end checklist.
6) Send Giving Statements to Contributors
As part of your end-of-year process, send each person who contributed to your ministry a statement detailing their contributions.
This record serves as proof of donation for their tax filings and also provides each person or family with a comprehensive view of how they supported your ministry financially over the last year.
Whether you mail or email these statements, make sure that you deliver them to your contributors promptly so they can file their taxes whenever they’re ready and see the big picture of how their donations helped your church this year.
7) Thank Your Donors
Each giving statement should also include a special thank you to your donors. Regardless of whether someone gave little or much, you should recognize their contributions and acknowledge the impact their gift had on your ministry.
You can also host a special lunch or other event for your top donors as a way to express your appreciation for those who have gone above and beyond to support your church.
Whatever you choose to do, making sure you say “Thank you”, is the best way to help encourage your congregants to continue to support you financially in the coming year. Some will continue to give regardless, but showing each of your contributors that you appreciate their gifts will go a long way in setting you up for future success.
8) Generate an Annual Report
Your annual report should be a single location for your leadership and congregation to see what went on in the life of your church over the last 12 months.
The report should include financial data (including sources and expenditures), member engagement, community impact, and other relevant information that helps tell the story of your church.
The purpose of an annual report is to help your congregants see the big picture of your ministry and provide accountability and transparency for how your church operates.
9) Conduct a Year-End Ministry Review
Using your annual report and other data from the last year, work with your staff and other leaders to look closely at how the year went and conduct a year-end ministry review.
Be honest about your successes and failures, what went well and what could’ve been better, how you did in terms of engagement and discipleship, what needs to be improved, and how you can grow in the coming months.
As you evaluate your ministry’s performance over the last 12 months, use the feedback to plan and set goals for the upcoming year.
10) Finalize Next Year’s Budget
As you’re reviewing your financial data for the current year, use that information to plan and finalize your budget for next year.
Compare your anticipated giving and expenses with the actual numbers. Consider which line items you want to include in your ministry plan again, which ones you need to change the budget for, and which ones you want to remove.
Having a solid budget in place at the start of the year, along with a plan to maintain it throughout the year, will help lead your church to financial success.
11) Set Ministry Goals for the New Year
Setting your goals for the new year is an important part of your end-of-year process.
Use your annual report, your year-end ministry review, and your finalized budget to set your ministry goals. You should have goals for every area of your ministry. They don’t have to be complicated and should absolutely be goals you feel are achievable.
The ultimate goal should be to see growth in your ministry, whether that involves increasing numbers or deepening discipleship, so the goals you set should reflect a desire to see growth occur.
12) Plan Your Q1 Calendar
You don’t need to have your entire calendar planned out by January 1st, but by the time you wrap up the end of December, you should have your calendar finalized for Q1.
Your congregants need to know what’s coming up in the life of your church, and your staff and volunteers need to be able to plan and prepare for what’s next.
Waiting until the last minute to plan your calendar will leave you scrambling and limit your ability to effectively prepare for events. You can always adjust as you go, but going into the new year with the first few months planned out will help set you up for success.
13) Update Member Information
The end of the year is the perfect time to verify that the information you have on file for each of your members is accurate.
Ask your congregants to review their directory information and make sure that you have the correct phone numbers, emails, addresses, allergies, medical information, and emergency contacts for minors.
Entering the new year with accurate contact information will help ensure that your members are informed about upcoming events and developments in your church.
14) Evaluate Curriculum and Study Materials
The end of the year is a great time to evaluate your small group curriculum and Bible study materials.
Talk to your leaders and teachers. Ask them how things are going, if they need any additional resources, or if they need something different. Use their feedback to determine if what you’ve been using is right for your church.
If it is, great! If not, consider the options within your budget and find the right resources to support your ministry, helping your members grow in their relationship with Christ.
15) Review and Update Your Communications Plan
As you review every area of your ministry and look for ways to improve in the coming year, part of that review should include examining your communications plan.
Ensure you review all the ways you currently communicate with your congregation and assess whether each method is effective in keeping your members informed.
Scrap or rework any methods that aren’t working, and invest your time and resources into the ways that do work to communicate with your members.
If you’re unsure whether your communications efforts are effective, consider using a survey or questionnaire to ask your members what works.
The best events, sermons, worship services, outreach programs, and other ministry efforts won’t mean anything if people don’t know what’s happening because your communications plan is lacking.
While the end of the year can be overwhelming, taking the time to ensure you have all your ducks in a row to wrap up this year and prepare for the next will set your ministry up for success.
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