Managing HR processes for a church can be challenging. It’s easy to get overwhelmed trying to streamline HR administrative workflows while managing special tax regulations, multiple campuses, accurate time tracking, and accounting processes.
Fortunately, HR technology can help automate many of these processes, allowing you to focus on your congregation and community. This blog will explore some common HR challenges churches face and how HCM software can make it easier to manage them.
One of the biggest church HR challenges is taxation. Faith-based institutions must comply with specific tax regulations such as:
Calculating these taxation items and ensuring payroll is accurate is a complex process. Working with an HR provider that thoroughly understands these regulations and can support and automatically calculate these items is critical to tackling compliance issues.
Another challenge faced by churches like yours is the management of multiple HCM platforms. Having more than one location makes it difficult to centralize HR tasks such as:
In particular, faith-based institutions have recruiting and onboarding needs that are rare compared to other businesses. They use search committees to:
Your church should consider a solution that centralizes pre-hire data and integrates with background screening providers to protect your organization from improper hiring practices.
Religious organizations have a precise way they set up their Chart of Accounts. Therefore, it’s crucial that reports the finance or budget committee uses are easy to understand. Churches need a general ledger (GL) structure that allows the committee to make informed decisions about how to use tithes and donations.
However, this can present a challenge if the output files need to be set up based on the Chart of Accounts. HR software that integrates with general ledger systems enables churches to analyze wages accurately at a granular level in their budget. For example, a church might cost a senior pastor’s housing allowance to its own line item.
Tracking time for church staff can also be a complex process. With complex labor structures, it’s easy to make mistakes when using paper timesheets, often resulting in underpaying or overpaying employees.
Furthermore, churches must categorize exempt and non-exempt staff to avoid noncompliance properly. Your church can benefit from HR technology that automates employee classification management and labor tracking to mitigate risk.
Partnering with an HR provider that understands your church’s unique needs allows you to automate your processes so you can refocus on your mission. To ensure you choose a solution that solves the challenges we’ve discussed and more, consider an HCM provider that offers the following:
Partnering with an HR technology provider with a thorough understanding of special taxation, such as ordained minister pay and housing allowance, helps churches maintain 501(c)(3) status. You can specifically look for a solution that has a certified tax team. These teams know how to include a housing allowance in the total income for benefits calculation rather than as a negative deduction.
In addition, HCM providers with expertise in church taxation can assist with setting up ordained minister pay to ensure that self-employment taxes are paid accurately and on time. Church leaders can allocate additional funds towards community initiatives when taxes are calculated and paid accurately.
Churches need a single-system platform that offers centralized visibility into HR items across campuses while allowing each campus autonomy over day-to-day tasks. This delegation enables administrative staff to centralize the hiring process and create autonomy with guardrails.
Let’s look at background screenings as an example. They are a crucial part of a church’s hiring process because they help protect the family dynamic of the church. Especially when most church staff members typically interact with children.
However, 70% of businesses don’t conduct background checks. Leveraging HR software that integrates with background screening providers ensures that trustworthy candidates are chosen.
Centralizing the hiring process into one system allows the main church campus to delegate responsibilities to other campuses while maintaining visibility and control. With efficient HR processes, each campus has the autonomy to maintain compliance while devoting more time and resources to community projects.
Religious organizations benefit from HCM solutions that integrate with church-specific accounting systems such as Sage Intacct, ShelbySystems, and Blackbaud. Connecting these platforms ensures accurate general ledger mapping and financial allocation across departments.
In addition, HR solutions that offer accurate general ledger output files help churches report labor expenses to finance committees that are easy to understand. Religious organizations can support their missions effectively with more visibility into HR and finance data.
It's essential to partner with an HCM technology provider that simplifies the time tracking of your staff to ensure compliance. Faith-based institutions typically have employees that report time in multiple ways:
Look for solutions that offer multiple time capture methods that allow allocation to different locations, cost centers, or GL accounts. For example, HR systems offering dynamic (timesheets) and static (percent) labor allocations can make tracking more efficient.
Your church has unique HR needs, and you need software and support that helps you automate and centralize your workflows. Partnering with an HCM technology provider that understands how to solve these common HR challenges can help your church grow and help its community.
APS makes payroll and HR easier for churches, religious institutions, and faith-based organizations nationwide with award-winning software and support. Churches often turn to APS when faced with challenges such as special taxation settings for ordained minister income, quality support, and accuracy in labor reporting in the general ledger.
Learn more about how you can use Verified First and APS Payroll to protect your organization!
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