May - June 2016
  1. Start with a cash reserve philosophy. Write it down. Why should the church have cash reserves?
  2. Decide if you need cash reserves for multiple purposes. You may need a debt service reserve and a capital replacement reserve in addition to an operational reserve.
  3. Set goals—what is your time horizon? It may take a few years to achieve your target cash reserve amount(s).
  4. Integrate cash reserve planning into the budgeting process. Building cash reserves rarely just happens on its own.
  5. Report, report, report! Annually evaluate cash reserves based on your target(s). Don’t be discouraged if you are not making the progress you desired—stay the course.
  6. Resist the temptation to use operating reserves for other purposes—except for emergencies.

Dan Busby is a certified public accountant and president of the Evangelical Council for Financial Accountability (ECFA).

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