I recently talked to a pastor whose bookkeeper was retiring.  He was struggling with the best option to replace the gentleman who had served his church for many years. 

He could hire someone experienced with bookkeeping that could also do things like answer the phones and run errands. 

Another option would be to outsource bookkeeping functions to a professional firm like Your Church Admin.

What would you do? Outsource your bookkeeping and payroll or keep it in-house? 

Often churches have no choice because they lose a bookkeeper and don’t have a qualified replacement, or their bookkeeping is a mess.

Other churches find themselves considering outsourcing because they’ve outgrown current systems. 

What is the best option, hire someone onsite or outsource?

Outsourcing bookkeeping and payroll can be a very smart move, but it's not a one-size-fits-all answer. Here's a breakdown of the pros and cons, plus key considerations to help determine whether it's right for your church.

Benefits of Outsourcing Bookkeeping and Payroll for Churches

1. Accuracy & Compliance

Outsourced firms are often experts in nonprofit and clergy-specific tax rules (e.g., housing allowance, FICA exceptions). 

Reduces the risk of IRS penalties from misclassifying staff or mishandling clergy payroll. (We can tell you stories!)

*Since 2012, Your Church Admin has only done church payroll and booking.

2. Cost-Effective

Hiring a full-time bookkeeper or payroll staff may cost more than outsourcing. Consider hidden costs such as paid leave, workman’s comp, supplies, etc.

You only pay for the services you need.

3. Focus on Ministry

Frees up staff and volunteers to focus on mission and ministry instead of administrative tasks.

4. Security & Continuity

A reputable firm will have systems in place to protect financial data and ensure consistent service even if individuals leave.  There is comfort in knowing you will never have to hire another bookkeeper.

Potential Drawbacks

1. Less Immediate Control

Day-to-day access to financial records may require coordination.

*Your Church Admin provides access to financial data and have staff available during all business hours.

Some churches prefer the control and visibility of in-house staff.

2. Upfront Time Investment

Transitioning to an outsourced provider requires setup time: data transfer, training, and policy alignment.  We call this process “migration” and our team walks churches through the whole process.

3. Cost (in some cases)

For very small churches with minimal transactions or volunteer help, outsourcing might be an unnecessary expense.  Your Church Admin serves churches of all sizes.  We can even set up software for small churches and train their bookkeeper to work independently.

Key Considerations Before Outsourcing

Size and Complexity: If your church has employees, grants, designated funds, or multiple ministries, outsourcing becomes more attractive.

Internal Capacity: Do you have a trained and reliable person who handles finances now? If not, outsourcing may improve accuracy and compliance.

Budget: Can your church afford monthly fees for bookkeeping/payroll services?

Compliance Risk: Clergy payroll is unique. Outsourcing to a firm with church experience can prevent legal and financial issues.

Best Practices if You Choose to Outsource

Hire a firm with church or nonprofit accounting experience.  

Ensure access to real-time reports and maintain internal oversight (e.g., treasurer or finance committee reviews).

Use cloud-based systems for transparency and ease of access.  Shelby Systems, QuickBooks Online, or Aplos are great options.

Keep internal controls—e.g., separation of duties for money handling and reporting—even if outsourced.

Bottom Line

Most medium to large churches—and even many small ones—benefit from outsourcing bookkeeping and payroll to ensure accuracy, legal compliance, and to free up staff time. However, each church should weigh the cost against the complexity of their financial operations and internal capabilities.