The Art of Negotiation

According to Dave Ramsey, everything is negotiable. In his FPU financial training series he says to pay cash for everything and always bargain. For the most part, I agree with him. However, have you tried going to Walmart and at the check out counter pull out cash and try to wheel and deal? I didn’t think so. I am sure Dave was not referring to retail big box stores. I do agree that money talks and have experienced it many times. My best friend is the king of negotiating and I have witnessed this multiple times. Here is his simple plan of negotiating and most the time it works great. 

• When shopping carry cash in small and large bills to use in the negotiating process 
• Never act like you are crazy for the item and just have to have it no matter what
• Walk by it several times and stop and look
• Once the clerk asks if you are interested in the item, say no and walk off
• Keep going by the item and looking at it
• Once the clerk asks again if you are interested in the item, now ask how much
• Always respond that’s too much and walk off
• The clerk now asks what you think the item is worth after the first price was given
• Reluctantly offer much lower and thus the negotiations have started
• Next pull out cash and make your offer. If they decline, then walk off.
• Stay firm with your offer and most the time the clerk will take a cash offer

Here is the art of negotiation. Don’t just accept the deal as is and let them know you really want the item. This process can be applied at home and in business. I use it all the time in business and have saved thousands of dollars over time. Let’s say you are working with a vendor offering you a service. You feel the cost is too high and you need a better deal. Use the same process above. You may not be using cold cash in the deal, but the rest applies. The vendor presents you a service at a cost and wants you to sign a contract. Start with acting like you don’t have to have his service. Look at the contract several times but walk away. Tell them you need to shop it more. The vendor adjusts the contract and pricing and you still look and walk away. You even get other quotes that are way less and have the same service. The vendor says this is his bottom deal. You respond with your other quote and ask him to match it or walk away. That’s cash to him and he takes the deal. Booyah! You just saved a lot of money from negotiating the deal. 

I try and use this art of negotiation from my best friend and Dave Ramsey’s advice about cash but it takes practice. Recently I was at a guitar show and stopped by a vendor with accessories. I spotted a nice guitar strap and asked the price. I was told $40. I walked away. The clerk stopped me and said she would take $35. I pulled out a $20-dollar bill and said I would give that. She took it! I was looking at a guitar online and the cost was $80. I offered $65 cash and he took it. You get it the message, right? Negotiate wherever you can at home and in business. The best part is after the deal knowing you made a huge savings.

 Your comments! Suggestions! Have you tried this?

5 Best Practices Counting Tithes and Offerings

High accountability should be exercised in all businesses including churches and non-profits. When you have donors contributing to your business, like a church does, there must be processes in place that give evidence of transparency but most of all accountability. In churches, counting the tithes and offerings properly must be of high importance. Here are several best practices that must take place in handling money in the church. If you are not doing these, stop and change your process to handle money the proper way and not give way to fraud or misappropriations of any funds. These may seem basic but I believe there are many churches still lacking in security and accountability in this area.

• Once money is collected during a worship service, ensure that two people walk it to the office. Allowing one person to carry the cash to the office is setting them up to fail and giving an opportunity for an unsafe situation. Always have two people with the money always until secured
• Don’t think that dropping the money on the Bookkeepers desk and locking the office is secure enough. Never hide the money bags under a chair, in a desk drawer, or in a filing cabinet. The best practice is to have a drop safe securely mounted to the floor that money bags can be dropped into. Also, use this drop safe for all department deposits from the staff during the week. Only give the combination to the drop safe to key people that need to be in there. I recommend that be no more than 3 people, one being just for back up and emergencies.
• Many churches still use volunteers the next day to count and process the offerings from Sunday. Keep the number of volunteers to a minimum but enough that you can rotate them around with counting so that you don’t have the same people every week. Use a secure room that is locked while counting. Provide the volunteers with forms to record amounts with that can be verified later if need be. The Best practice is to have a member of your financial staff present and counting too.
• Now that the money is counted and verified, use the drop safe again to hold the money until a trip to the bank is arranged. The best practice would be to use an armored car service that picks up directly at your office each week. Otherwise, don’t let the same person go to the bank at the same time on the same day each week. Vary that process up using multiple staff people.
• Now that you are ready to post the deposits and donor contributions, I recommend segregation of duties. Don’t let the same person do all the counting and posting. For posting, let the Bookkeeper make the journal entries, another staff member posts the contributions, and the Business Manager does checks and balances.

Comments! Suggestions!

5 Core Essentials in Church Finance

Church Business Administrators, wear so many hats covering so many diverse departments, it can be a real challenge to balance it all. There are only so many hours in the day and sometimes it just does not get done. Daily “to do” lists can be created but with so many areas demanding their time, the Church Administrator can be distracted and not catch the important core essentials that keep the business of the church operating with smoothness. Here are 5 core essentials I believe every Church Administrator must perform in providing excellence in church finance. 

Transparency in Financials

The Church Business Administrator must develop a sense of transparency to the church that everything is visible to all. This does not mean you must show every person every part of the church financials. Presenting transparency to the church at large will eventually build trust and most will not even care to see it all knowing that everything is in order. State that you have an open-door policy and anyone at any time can see the church financials. Obviously, you must first HAVE all the financials in order, to present transparency. Be intentional in becoming transparent. Start by reporting key numbers that the church needs to know to ensure them the finances are in order.

Relevant Reporting

Research and find what the church wants to see each month and then report it in a timely manner. Look for stats that have meaning and that show the direction the church is headed, even if it is decline. Pull together a summary dashboard report that gives the state of the church financially and operationally that is easy to read and understandable. Include items like giving, attendance, special fund giving, cash flow, income / expense, emergency fund balance and other stats pertinent to the church. Include stats from all areas of church business administration at some point in reporting.

Annual Inspection

Do not rely on your own judgement or that of a committee that everything is in order financially and operationally. Use the services of a third party to inspect your work every year. There are different levels of inspection like compilation, review, and audit. Depending on the churches situation, choose one of those levels. For example, if the church is debt financed, the bank may require an audit. Conducting an annual inspection further enhances your transparency and further builds the trust of the congregants. Make the results of the inspection available to leadership and the church if so desired.

Promote Giving

Do not assume every person knows how to give to the church. With the tech age, ways to give not only expanded but also got complicated for many donors. If the church uses state of the art giving like Text to Give, make sure there are instructions easily accessible for those first-time users. Remind the church congregants about how to give and include it as a regular part of church promotions. With any special giving emphasis, include the ways to give with the presentation.  

Trends and Forecasting

This one ties the other core essentials together. Using meaningful metrics in church administration is key. Track everything in church finance using that info to build useful metrics that give the church a wide-angle view. Tracking will build the trends needed to see where the church has been, where they are currently, and where they are headed, financially speaking. Forecasting is not predicting the future. It simply gives the church a picture of where the church may be headed. Include in your tracking stats items like per capita, average monthly giving, budget history, and attendance.

By Rick Cadden CCA, CCBA
Associate Administrator, First Baptist Marble Falls, Texas
Speaker and Trainer in Church Business Administration