In my agency, I am partially responsible for creating, implementing, maintaining, analyzing, and reporting against the company annual budget, and I am always looking for ways to make the process smoother and more meaningful for all involved, and to give it the attention it deserves. Since I know how important sound financial management is, as it is a core principle and best practice we teach, this year I am spending more time and thought into the budget planning process to find ways to improve it and make it easier. Jessica Logan of Clifton Larson Allen states, “A well planned, well documented, and well executed budget can help you monitor, predict, and maximize the activities that support your mission, ultimately making you more effective and successful.”
I hope that some of the following information to streamline your budgeting planning process will assist you:
Do your agency strategic planning first. Your annual budget should match and mirror the goals and initiatives set forth in your strategic planning session which of course should include all key stakeholders – board members, staff, and volunteers or others as appropriate.
Create a budget timeline. Map out an annual timeline for the budget process months before a preliminary or final budget is needed to be presented to your board or finance committee for discussion and approval. Schedule your strategic planning first (see above.)
Define expectations from all key people. Keep participants knowledgeable about their roles and responsibilities in the planning process. Include everyone involved so that they understand ahead of time what you expect of them. Provide them reasonable due dates and deadlines.
Document everything. Write down all ideas, assumptions, plans, projections, etc. Perhaps you won’t use every idea proposed, but you will want to capture everyone’s contributions.
Determine what tools you need. Most small organizational budgets can be effectively managed using Excel spreadsheets. Larger agencies may consider special budgeting software. A simple Google search results in many options.
Collect your data and check for accuracy, including all Excel formulas and assumptions. It is very important that your agency budget be accurate as it will be shared with funders and other donors who will rely on you for correct and accurate information.
Here are some excellent, detailed budget tips from Kay Snowden of Third Sector New England.
Finally, remember that your budget should reflect and fully support your agency’s mission and vision. I hope that some of the above tips will be useful in your next annual budget planning process.