One of the tasks organizations must do often is to prepare a budget. A budget is a tool used for planning and controlling your financial resources. It is a guideline for your plan of action, expressed in financial terms within a set period. A budget does not have to be complex, as the information below will explain.
What a Budget Accomplishes
- It helps refine goals.
- It compels members of the organization to use funds efficiently.
- It provides accurate information to analyze, adjust and evaluate programs and activities.
- It aids in decision-making.
- It provides a historical reference to be used for future planning.
Pre-Budget Considerations
Knowing your organization's priorities, objectives and goals helps as you begin to prepare your budget. As you begin, ask yourself the following questions.
- What is the period with which you are working (e.g., one term, entire school year)?
- What does your group most want to accomplish?
- How will you accomplish this?
- How much will it cost?
- Where is the money coming from?
Once these questions have been answered, you are ready to begin preparing your budget.
Preparing Your Budget
- Prepare an outline of the organization's planned future activities.
- Determine and record available funds (e.g., carryover balance from previous year).
- Estimate and record expected income and when it will be available (dues, t-shirt sales, etc.).
- Define and record needed expenses (advertising, rentals, printing, supplies, etc.).
- Review, revise and then assemble into a final budget.
- Have members vote for budget approval.
THE BUDGET MUST BE FLEXIBLE TO ANTICIPATE CONDITIONS THAT MIGHT HAVE BEEN OVERLOOKED DURING THE PLANNING PROCESS.
Managing the Budget
- Once prepared and approved, it should be closely managed.
- Set and maintain a minimum cash balance.
- Formulate general policies and procedures needed to achieve objectives while providing internal control (e.g., allow only approved expenditures).
- Keep an accurate written log of financial transactions (income and expenses).
- Periodically compare the budget to your actual logged expenditures.
print
email