I’ve said this over and over in this series, you have to build trust with leadership when it comes to budgets. I remember coming into a new church some years back and after about 3 months went to lunch with the senior pastor. After I spent 45 minutes telling him what I found—basically the place was a mess and almost everything needed to be replaced—he said, “Mike, I’ve dealt with a lot of tech guys, and they all say the same thing; ‘The last guy did it all wrong and we need to change it.’ Why should I believe you?” I started in on what I thought would be another 45 minutes of explaining my position with as many facts as possible. After about 15 minutes he stopped me and said, “Ok, ok, I get it. I believe you. What is it going to cost, and how long will it take?”
That was the beginning of building trust. I didn’t go in saying, “I don’t like EAW speakers or NSI dimmers.” I explained, with as many facts as possible that our PA was not designed nor installed correctly and as a result, most of the room was not being covered properly. I shared with him my findings, complete with pictures, that the dimmers were dangerously overloaded and were going to fail—soon.
This is God’s Money
Whenever we talk about church budgets, it’s important to remember where the money comes from. In truth, all the money is God’s, but He lets us use some. The money that comes in to the church bank account is given by the people of the church. They worked hard for that money and for many, it’s a sacrifice to give it. They are often doing without personally to give to the church. They give it with the expectation that it will be used to spread the Gospel more effectively and make an impact on their community and world.
This is why it’s so important that we spend it wisely. Every dollar should be considered carefully. This is not to say that you shouldn’t spend it, or even spend it on things that make your job easier. When I was new as a TD, I struggled with buying things that made my life easier. Eventually, I figured out that if I was more productive, more got done and I had more time to spend with volunteers. Or I just got to go home on time, which kept me from burning out. It’s a balance.
I told you that I had a spreadsheet that tracked every dollar spent from the tech account. About half-way through the year, I made an appointment with the accounting department to go through, line by line, and audit our expenses. Often, I found they had accidentally charged expenses to my account that should have been someone else’s. Occasionally, they found one or two I didn’t have in my sheet. Our finance guy told me I was the only department head to ever do that. He was surprised and thrilled I would take the time to do it.
During weekly meetings with my boss, he might ask me where were with the budget. Initially, he would say, when you get a chance, shoot me an email. But I could pull it up on my iPad and tell him to the penny where we were. I could tell him, “Well, we have 61% of the year left, and I’ve used 32% of my budget, so overall we’re good. Equipment is a little high, but that’s because we front-loaded some expenses for the summer when we were slower. That will drop off and of course, in a few moths, we’ll blow a bunch of rental.” That buys a lot of trust, especially when most of the department heads have no idea where they are.
Most finance guys don’t really care if you go over in one category as long as the overall budget comes in on target. So if you plan really well and do a good job of managing expenses, you might have some money left over at the end of the year. I used to use this surplus to accelerate my new equipment purchases.
Typically, with a few months remaining in the year, I’d look at my budget and see where I stood. If I had some funds left over in a category that wasn’t likely to be used up, I would check with finance and say, “Hey, can I move $6,000 over to equipment and get a few new things we were needing anyway?” Usually the answer was, “Sure, I don’t care, as long as you come in on budget for the year.”
I maintained a running list of things that needed to be replaced or purchased, and when there was extra money, I got that done. Sometimes, I was able to take advantage of a big sale or special deal to save even more. Always talk about the savings. You don’t have to beat up your suppliers (they get sick of that real quick), but when there is a deal to be had, take advantage of it. And tell your boss.
Each year, your actual expenses should get closer and closer to the budget. The first year you might be high or low, perhaps by a lot, because you didn’t know. Year two should be closer and by year three, you should be within a few hundred dollars of your budget numbers.
It’s important to not come in crazy-low with your actual spending. If you do, leadership will wonder if you just padded your budget like crazy because you don’t know what you’re doing or you just don’t care enough to figure it out. Getting more will be hard in the future if you do that.
I was routinely told that I was one of two or three department heads that came in right on budget each year. Do that for a few years, and you will get very few questions on your budget submission. Of course, you should have written rationalizations for why you are requesting what you are. Submitting that with the budget goes a long way toward convincing leadership you know what you’re dong.
OK, I just realized we didn’t talk about capital expenditures and end-of-life funds. Looks like we’ve got some fodder for next week!