The largest challenge in setting up the Statement of Functional Expense report just might be coming up with a good natural classifications list.  I consulted with several accountants, auditors, and accounting firms asking what they might be advising their church clients to use.  The list below is a composite of that research.  You also should check with your auditor for additional guidance. 

Use this link for full instructions on setting up your Statement of Functional Expense

Thanks to ECFA, Rodney Smith with PSK, and Dave Heston for their contributions to this list.

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