How to manage budget?
Budgeting should be preceded or accompanied by setting organizational goals as these figures are the “HOW will my organization reach those goals”.
Free budgeting tools (online):
- Google’s Annual Budget Template
- Money Management Template from Vertex42
Steps to writing an organisational budget:
Step 1: Make a budget for your expenses.
Make a forecast of your spending for the coming fiscal year. It could be yearly rent, salary, or other expenses. In other circumstances, it may be telephones, utilities, and so on; a monthly cost estimate. You should also set aside some funds for unforeseen expenses.. When completing all of this, try to be as precise as possible, and if possible, reference actual figures.
Step 2: Yearly Expense Estimation
This might contain salary or earnings for all employees, broken down by job. This will also cover the rent or mortgage for your organization's location, as well as utilities like heat, electricity, gas, and water, as well as phone, internet, and insurance.
Step 3: Calculate the Material Costs
If you need materials for activities and such at your workplace or group, or just ordinary supplies, you must factor this into your budget as well. If you have equipment like computers or other electronic devices, make sure to account for repair expenditures throughout the year.
Step 4: Required Expenditures
Payments for loans, consultant services such as audits, accounting, and bookkeeping, payments to other organizations for particular services, printing and copying from outside sources, transportation for employees, participants, and volunteers, and car maintenance if your organization has vehicles
Step 5: Estimated Expensive Item Expenses
You can use this account to save aside money for items that you may not be able to purchase in the near future but still want. This ensures that these items are on the table, even though they may take some time to become a reality. To determine your consolidated budget, sum together all of your spendings.
Budgets and business planning
A budget is a strategy for managing your finances and ensuring that you can meet your present obligations.
It also allows you to make informed financial decisions and achieve your goals.
Ensure that you have sufficient funds for future projects.
Tips:
Make annual budgeting a goal.
Use last year's data as a starting point, but merely as a guide.
Make budgets that are reasonable.
Involve the appropriate individuals.
What to include in an annual business plan:
- a description of the changes you wish to make to your organisation, as well as prospective changes
- your year's goals and objectives, as well as how will you measure your success
- any issues or difficulties
- any operational alterations
- financial performance and predictions
- information about your management and employees
- information on the business's investment
What to include in a budget:
Projected cash flow - On a month-by-month basis, your cash budget estimates your future financial position. This type of budgeting is critical for small organisations since it allows you to identify any problems you may be having. It should be checked at least once a month.
Costs – typically three types*
Fixed costs - A fixed cost in your budget is one that you can expect to be the same, or very close to, throughout time.
Examples: internet, health insurance, property taxes, salaries, municipal taxes, utilities such as heating, lighting, cell phone, automobile expenses, printing, equipment, advertising, travel expenses, legal costs, etc.
Variable costs - A recurring variable expense is one that occurs over a week, month or year. The amount you pay each month may fluctuate from past payments or payments you'll make in the future.
Examples: gas, heating, parking, grocery shopping, healthcare expenses, etc.
Capital costs - Capital costs are one-time, fixed expenses such as the purchase of computer equipment or office space.
Revenues – refers to the funds generated through the organisation’s primary activities. It could include funds raised through donations, fundraisers, membership dues, and service fees.