Pastors wear many hats: shepherd, teacher, visionary, and counselor. But let’s be honest: “financial analyst” probably isn’t the one that excites you most. Still, ministry leadership requires knowing how to read and interpret your church’s monthly financial statements.

The good news? You don’t have to be a CPA to understand the essentials. With a little guidance, you can use these reports to lead your church confidently and be a good steward of the resources God has given. Many in your church may not feel confident reading financial reports either, including some of your board, so the more you equip yourself in this area, the better you can communicate the financial health of the church to others.

Why It Matters for Pastors

Monthly financial statements are an amazing tool just waiting to be utilized. They help give you:

• Clarity for decision-making – Knowing what’s available helps you make ministry plans that are financially sustainable.
  
  
• Early warning signs – Spot trends before they become problems, like a dip in giving or overspending in a ministry area.
  
  
• Greater trust in the mission– When you can speak clearly about the church’s finances, people feel assured their gifts are being handled wisely.
  

The Three Key Reports to Review

1. Statement of Activities (Income Statement or P&L)

This shows what came in and what went out during the month.

You can start by looking for:

• Total giving vs. budgeted giving
  
  
• Expenses compared to budget (any areas running high?)
  
  
• Net surplus or deficit for the month
  

Example: The P&L shows building and maintenance budgeted at 2,000 but actual spending at 8,000, a 6,000 overage. You can look healthy overall and still have a line that is off. The P&L shows where spending is not matching the plan, so you can decide whether it was a one-time repair to explain or a trend to correct.

2. Statement of Financial Position (Balance Sheet)

This shows what your church owns and owes at a specific date.

Look for:

• Cash on hand – Is there enough to cover upcoming expenses?
  
  
• Liabilities – Are there loans or unpaid bills that need attention?
  
  
• Restricted funds – Money designated for a specific purpose that can’t be used for general needs.
  

Example: Your main bank account has $60,000 in it, but $45,000 is designated for building funds, and you have $8,000 in bills due soon. The Balance Sheet helps you understand that you only have $7,000 in pendable cash, so delay non-urgent purchases.

3. Cash Flow Statement

Even with steady giving, cash can get tight if timing is off. A cash flow statement tracks how cash actually moved during the month across operations, investing (big purchases), and financing (debt).

This report may not be helpful when

• Operations are simple, you track cash weekly, and you keep healthy reserves. The bank balance and Budget vs Actual already give you what you need.
  
  
• You report strictly on a cash basis and rarely have timing gaps between inflows and bills.
  

Best fit for churches that have:

• Debt service, building campaigns, or capital purchases.
  
  
• Uneven inflows like tuition or seasonal giving.
  
  
• Multiple restricted funds or accrual reporting.

Look for:

• Trends in when giving comes in vs. when bills are due
  
  
• Large seasonal fluctuations to prepare for (like summer dips in giving)

Example

The P&L shows a small surplus, but cash fell by $25,000 due to a $15,000 roof repair and $10,000 of loan principal. You can “make money” on paper and still have less in the bank. The Cash Flow Statement explains where that cash went, often to big projects or loan payments that don’t show up as regular expenses.

Tips for Making the Most of Your Review

1. Schedule It – Put a recurring calendar reminder to review reports soon after month-end.
   
   
2. Ask Questions – You’re not expected to know every accounting detail. Clarify anything that doesn’t make sense with your bookkeeper or accountant.
   
   
3. Focus on Trends, Not Just Numbers – Compare this month’s numbers to previous months and to the budget.
   
   
4. Share Insights – Bring highlights to your board and celebrate good news with the congregation when appropriate.
   

Scripture reminds us, “Be diligent to know the state of your flocks, and attend to your herds” (Proverbs 27:23). For pastors today, this means being attentive not only to people but also to the resources entrusted to your care. Reviewing your monthly financial statements is one way of practicing that diligence, ensuring the church is positioned to shepherd well in every area of ministry.

Leading With Clarity Through Your Financial Reports

As a pastor, you already read people and moments. Reading your monthly statements is the same kind of shepherding for resources. A quick, consistent look at the P&L, Balance Sheet, and Cash Flow shows what is healthy, what is under pressure, and what is just timing. That clarity makes you a calmer decision maker. You can pace ministry plans, protect payroll and missions commitments, and decide on events or hires with confidence.

Action Step: This month, block 30 minutes to sit down with your financial reports. Look for one positive trend to celebrate and one area that needs attention. Share both with your board or leadership team.