What is a budget? Simply put, a budget is a guide to how you intend to use your financial resources as well as a helpful resource for those that follow after you.
As an executive officer in an organization, especially a treasurer, it is your responsibility to create an accurate budget not only for yourself but for your organization as well. It is an outline to what your organization can and cannot do both in the now and in the future.
The first step in creating a budget is knowing what your organization needs, wants and has. Identify what your members want to do, how much it will cost, and where the financial resources are coming from. Once you know this, you’re on to step two, preparing your budget. Start by creating a calendar of events to outline all the activities your organization has planned. Then determine your available funds as well as expected funds and when they will be available to see if those activities are plausible. After this, outline the expenses of the group and when they will be occurring. Once this is done put it all together in a master sheet of income and expenses as well as a total income by the end of your designated time period (ie. One year, one semester, one month). One last important step that no organization should ever miss is the approval of the members. This is a crucial step to inform them of what is happening financially as well as create a sense of transparency between the leaders of the organization and the members, which will in turn create more trust.
You’re not done yet!
The final step is managing the budget that was just created to ensure that the financial goals outlined in the budget are being met. You can do this by setting a minimum cash balance that must be in your account at all times. It is also important that whoever is in charge of the finances, keeps an accurate log of all the financial transactions which can then be used to compare with the original budget that was created.
Tip #1: If all isn’t working out as planned don’t stress out; a budget needs to be flexible. There will always be those unexpected costs or circumstances that will throw a wrench into the plans, aka the budget. If the budget is created correctly, you will be able to overcome those setbacks, adjust, and continue progressing forward.
Tip #2: At the end of your set time period, for which the budget was created, review the actual costs in order to establish priorities and changes for the next budgeted period. Start early, an easy rule of thumb is to begin preparing the next budget a month prior to the end of the current budgeted period.