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Fund Accounting Software for Churches: Requirements and Options
Last updated: October 7, 2026 · Independent buyer’s guide · We do not sell rankings or coverage.
Fund accounting software for churches keeps every gift in the fund the donor or the board intended, produces year-end contribution statements that meet IRS acknowledgment rules, and reports balances by fund to your finance committee. Most small and mid-sized US churches can do this in a church management system with built-in fund accounting for $29 to $129 a month at list price. The harder requirement is clergy payroll, which several popular church tools do not run at all.
Key takeaways
- Separate donor-restricted funds from board-designated funds in the software. They sit in different net asset classes under FASB ASU 2016-14.
- A year-end giving statement can satisfy the IRS written acknowledgment rule for gifts of $250 or more if it carries the required wording on goods, services and intangible religious benefits.
- The housing allowance must be designated in advance by official action. Payroll should keep it out of W-2 box 1 and withhold no Social Security or Medicare tax from the minister.
- ChurchTrac and Aplos do not calculate payroll themselves. PowerChurch Plus includes payroll with housing allowance tracking. ACS Technologies and ShelbyNext do not publish prices.
Who this guide is for
You are a treasurer, business administrator or finance committee member at a US congregation. For a broader look at church administration tools, see our overview of software for churches.
How church fund accounting works
Funds and the shared bank account
A church ledger has to show whose money it holds and what each amount can be spent on. Fund accounting gives each fund its own balancing set of accounts, so the building, missions and general funds each carry a balance you can report on its own. Because one checking account usually holds several funds, the software must split a single deposit across funds and show each fund’s share of the cash.
Donor-restricted versus board-designated
FASB’s ASU 2016-14 reduced not-for-profit net assets to two classes: net assets without donor restrictions, which include board-designated amounts, and net assets with donor restrictions (Kreischer Miller, April 3, 2018). The standard also requires disclosure of the amounts and purposes of board designations.
A $5,000 gift “for the new roof” is donor-restricted, and the board cannot move it to cover a payroll shortfall. A $100,000 operating reserve set aside by the board can be released by another vote. Your software should tag each fund with its net asset class so the balance sheet groups them correctly.
Contribution statements
IRS Publication 1771 says a donor needs a contemporaneous written acknowledgment for any single contribution of $250 or more. It must show the church’s name, the amount of cash given, a description (not a value) of any property given, and whether the church provided goods or services in return, including a statement where the only benefit was an intangible religious benefit. One annual summary may cover several gifts (IRS Publication 1771, revised November 2023).
Check that the software lets you edit the statement wording, exclude non-deductible items such as camp fees, and send statements in bulk by the end of January.
Clergy payroll and the housing allowance
IRS Publication 15-A states that whether the minister is an employee or self-employed, the earnings of a minister are not subject to federal income, Social Security and Medicare tax withholding. The church may agree with an employee minister to withhold voluntarily to cover the minister’s income tax and self-employment tax, and that amount goes in Form W-2 box 2 (IRS Publication 15-A, last reviewed April 30, 2026).
The church must officially designate a definite housing allowance amount before paying it, for example in board minutes, a budget or an employment contract. The minister can exclude the smallest of the amount designated, the amount actually used to provide a home, and the fair rental value of the home, and the exclusion applies to income tax only, not self-employment tax (IRS Publication 517, last reviewed April 30, 2026). The IRS also states that payments designated as a housing allowance must be used in the year received (IRS FAQ, last reviewed October 1, 2026).
For the W-2, Publication 15-A says to leave the excludable housing allowance out of box 1 and show no Social Security or Medicare wages, and it permits reporting the allowance in box 14 or on a separate statement. A payroll system that treats your pastor like any other employee gets both wrong.
Board and finance committee reporting
Churches are excepted from filing Form 990 (IRS, last reviewed June 27, 2026), so the monthly board packet carries most of the accountability. It should include a balance sheet by fund, an income statement with budget versus actual for the general fund, and a fund activity report showing opening balance, gifts, spending and closing balance for each designated fund.
Where church books usually go wrong
- Designated gifts recorded as general income, then spent on operations.
- Housing allowance set in December for the same year. Publication 517 requires designation before payment, so a late resolution cannot cover amounts already paid.
- FICA withheld from the pastor because the minister was set up as a standard employee.
- Fund balances kept outside the ledger that no longer tie to reconciled cash.
How church fund accounting software handles it
Church management systems such as ChurchTrac and PowerChurch combine membership, giving and a fund ledger. Aplos focuses on the ledger and relies on a payroll partner. Larger nonprofit financial systems are covered in our nonprofit accounting software guide.
ChurchTrac
ChurchTrac says it is “purpose built for tracking all of your designated and restricted funds across multiple bank accounts,” with unlimited funds, bank sync, and reports including a balance sheet, income statement, fund sheet and fund statement, plus budget versus actual. Its limitation is payroll. ChurchTrac states that you can track payroll but “will need a separate payroll software for your calculations and direct deposit” (ChurchTrac accounting features, no date shown).
Aplos
Every Aplos plan includes donation tracking and giving statements, and the Lite plan already includes a balance sheet and income statement by fund plus a board portal. Budgeting starts on Core, and budgeting by fund or grant requires the Advanced plan. Aplos does not price its own payroll and points customers to its Gusto partnership (Aplos pricing, no date shown).
PowerChurch Plus
PowerChurch Plus, sold as desktop software or online, lists multiple accounting funds with separate, parallel-running charts of accounts, 35 fund accounting reports, budgets, five contribution statement layouts with email delivery, and payroll that can “easily track pastor salary and housing allowance,” with W-2 and 941 printing or e-filing through a PowerChurch service (PowerChurch Plus feature details, no date shown). The online edition’s standard license covers two concurrent users.
IconCMO
Icon Systems sells IconCMO accounting separately from its membership and donations packages, with payroll as an add-on. The pricing page does not itemize clergy payroll features, so ask to see a minister pay run (Icon Systems pricing, page metadata dated August 20, 2026).
ACS Technologies and ShelbyNext
ACS Technologies offers Realm Accounting and ACS Financials, which it describes as a double-entry system that “adheres to nonprofit accounting standards,” with fund accounting, payroll with “ministry-specific details for pastors and leaders,” and donor tax statements. No pricing is published (ACS Technologies, last modified October 17, 2025). ShelbyNext Financials lists general ledger, payroll with tax calculation, fixed assets, purchasing and GAAP-compliant reporting for churches and denominational offices, also without published pricing (Shelby Systems, page metadata dated May 15, 2020).
Payroll add-on: Gusto
Gusto documents a “Minister’s housing allowance” earning type that is not subject to federal income tax when IRS rules are met, is excluded from W-2 box 1 and is totaled in box 14 (Gusto support, no date shown).
Published pricing compared
Prices below were checked on October 7, 2026 on each vendor’s own site. For wider context, see our nonprofit software pricing guide.
| Product | Published price (USD) | Fund accounting and statements | Clergy payroll |
|---|---|---|---|
| ChurchTrac | $29/month (75 names) to $119/month (unlimited); 10% off annual; optional accounting setup from $399 | Included on all tiers | Not built in; tracks payroll entered from a separate system |
| Aplos | Lite $79, Core $129, Advanced $229 per month list; Lite and Core at 50% off for three months under an offer ending October 31, 2026 | Included; fund budgeting on Advanced | Through Gusto partnership |
| PowerChurch Plus | Desktop $445 one-time; Online $47/month or $499/year for 2 concurrent users | Included | Built in, with housing allowance tracking |
| IconCMO | Accounting $35 or $45/month; membership and donations $50 to $125/month; payroll from $40/month | Sold as separate packages | Add-on service; clergy features not itemized |
| ACS Technologies | Not published | Fund accounting and donor tax statements listed | Payroll listed with ministry-specific details; housing allowance not described |
| ShelbyNext Financials | Not published | General ledger listed; fund accounting not described on the page | Payroll with tax calculation listed; housing allowance not described |
| Gusto (payroll only) | Simple $49/month plus $6 per person; Plus $80 plus $12; Premium $180 plus $22 | Not applicable | Documented minister housing allowance setup |
Worked example
Illustration: the figures below are invented to show the mechanics. A church with one ordained pastor adopts its budget in November, setting the pastor’s cash compensation for the next year at $78,000 and designating $26,000 of it as housing allowance.
- Payroll setup. The pastor is paid twice a month, so each payroll carries $1,083.33 of housing allowance and $2,166.67 of salary. No Social Security or Medicare tax is withheld, and a voluntary agreement withholds $900 per payroll.
- Year-end W-2. Box 1 shows $52,000, box 2 shows $21,600 of voluntary withholding, boxes 3 to 6 are blank, and box 14 shows the $26,000 housing allowance. The pastor works out the actual exclusion on their own return.
- Designated funds. At 31 December the donor-restricted roof fund holds $48,000 and the missions fund $12,500, so the balance sheet shows $60,500 with donor restrictions. The $90,000 board-designated reserve sits within net assets without donor restrictions, with a note on its purpose.
- Statements. A family gave $4,200 in offerings, $1,000 to the roof fund and paid $300 for a youth camp. Their statement shows $5,200 of contributions with the intangible religious benefits wording, and leaves out the $300 camp fee.
Each step depends on a payroll, fund or statement setting, so ask to see each one in a vendor demonstration.
Our independent take
For most small and mid-sized churches, payroll decides the choice.
If you want one system and a low one-time cost, PowerChurch Plus documents housing allowance payroll and is the only product here with a published one-time price. If you prefer a modern cloud ledger, ChurchTrac or Aplos paired with a payroll service that documents clergy handling, such as Gusto, is a sound combination, though you will maintain two systems.
Three buyer scenarios
A rural congregation of 90 members with a volunteer treasurer and a bivocational pastor. ChurchTrac at a lower tier or PowerChurch Online covers fund balances and January statements. For a small fixed clergy salary, a payroll service with a documented minister setup is simpler than learning a payroll module.
A suburban church of 600 attendees with a business administrator and two ordained staff. Aplos Core or Advanced, depending on whether you budget by fund, plus Gusto gives you board reporting and documented clergy payroll.
A multi-site church with a finance office, purchase approvals and a denominational reporting requirement. Shortlist ACS Financials and ShelbyNext Financials, and compare them with the nonprofit systems in our QuickBooks alternatives for nonprofits guide, because neither church vendor publishes pricing.
When you do not need dedicated software
If your church has a few dozen giving households, one or two small designated funds and no paid ordained staff, a spreadsheet reconciled to the bank monthly may be enough. You still need Publication 1771 acknowledgments for single gifts of $250 or more.
If your denomination or a church accounting firm already keeps your books and runs clergy payroll, a second system duplicates work. Ask the provider for the three board reports described above instead.
How we researched this
We read the IRS publications that govern ministers’ pay and charitable acknowledgments, a CPA firm summary of FASB ASU 2016-14, and each vendor’s own pricing and feature pages, all checked on October 7, 2026. We also reviewed the guides from ChurchTrac, Cougar Mountain, Capterra and Donorbox that rank for this topic. No vendor paid for inclusion, and we did not test the software hands-on, so confirm the payroll steps in a live demonstration.
Related guides
- Pledge Management Software for Nonprofits (2026 Guide)
- Donor Management Software for Nonprofits in 2026
Frequently asked questions
What is fund accounting for a church?
Fund accounting tracks money by purpose as well as by account, so gifts for the building, missions or benevolence keep their own balances.
Can QuickBooks do church fund accounting?
General small-business accounting tools can approximate funds with classes or similar tags, but they were not designed around restricted balances or contribution statements. Church-specific products include fund reports and giving statements without that workaround.
Do churches have to withhold Social Security tax from the pastor’s pay?
No. IRS Publication 15-A states that a minister’s earnings are not subject to federal income, Social Security or Medicare tax withholding. The church can withhold voluntarily if the minister asks.
When does the housing allowance have to be approved?
Before the church pays it. IRS Publication 517 requires an official designation of a definite amount in advance, for example in board minutes, a budget or an employment contract.
What must a church contribution statement include?
For any single gift of $250 or more, it must show the church’s name, the amount of cash, a description of any property, and whether goods or services were provided, including a statement about intangible religious benefits where that applies. One annual statement can cover all gifts.
How much does church accounting software cost?
Published prices in October 2026 run from $29 a month for ChurchTrac’s smallest tier to $229 a month for Aplos Advanced, and PowerChurch Plus desktop costs $445 once. Payroll is often extra, for example Gusto from $49 a month plus $6 per person. ACS Technologies and ShelbyNext quote on request.
Sources
- IRS, Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers, last reviewed April 30, 2026. irs.gov
- IRS, Publication 15-A, Employer’s Supplemental Tax Guide, section 4, last reviewed April 30, 2026. irs.gov
- IRS, Ministers’ compensation and housing allowance FAQ, last reviewed October 1, 2026. irs.gov
- IRS, Topic 417, Earnings for clergy, last reviewed September 24, 2026. irs.gov
- IRS, Publication 1771, Charitable Contributions: Substantiation and Disclosure Requirements, revised November 2023. irs.gov
- IRS, Annual exempt organization return: Who must file, last reviewed June 27, 2026. irs.gov
- Kreischer Miller (CPA firm), Not-for-profit industry alert: net asset classification requirements, April 3, 2018. kmco.com
- ChurchTrac (vendor), Pricing, no date shown, checked October 7, 2026. churchtrac.com
- ChurchTrac (vendor), Church accounting features, no date shown, checked October 7, 2026. churchtrac.com
- Aplos (vendor), Pricing, no date shown, checked October 7, 2026. aplos.com
- PowerChurch (vendor), Products and pricing catalog, no date shown, checked October 7, 2026. powerchurch.com
- PowerChurch (vendor), PowerChurch Plus feature details, no date shown, checked October 7, 2026. powerchurch.com
- Icon Systems (vendor), IconCMO pricing, page metadata dated August 20, 2026. iconsystemsinc.com
- ACS Technologies (vendor), Church accounting solutions, last modified October 17, 2025. acstechnologies.com
- Shelby Systems (vendor), Church accounting, page metadata dated May 15, 2020. shelbysystems.com
- Gusto (vendor), Minister and clergy housing allowance set up and tax rules for admins, no date shown, checked October 7, 2026. support.gusto.com
- Gusto (vendor), Pricing, no date shown, checked October 7, 2026. gusto.com
Sherman Hsieh
Independent analysis of enterprise software — ERP, CRM and more
