Budget development and approval
A budget is the financial description of an action plan outlining how you will use your money, based on knowledge and assumptions against which you will measure your actual performance.
It is important to be honest about what you can manage in income and expenditure, so that you develop a realistic budget that helps you weather the unexpected throughout the year.
Key questions to consider when developing a budget:
What are our objectives?
- What activities will be involved in achieving these objectives?
- What resources will be needed to perform these activities?
- What these resources will cost?
- Where the money will come from?
Your organisation should regard budget preparation as the joint responsibility of finance and non-finance staff. Each group brings their own areas of knowledge and expertise which contribute to creating realistic and informed budgets.
The trustees will need to have a say in budget planning as they have the legal responsibility for approving the annual budget.
Source: Knowhow NonProfit
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