Financial Management

and Budgeting
“SHOW ME THE MONEY!”
 What is a budget?
 A budget can be a helpful method of keeping
track of group funds.
 It is a tool for planning and controlling
organizational funds.
 It is a formal written guideline describing your
organization’s future goals expressed in financial
terms within a set period of time.
 A detailed statement of estimated income and
expenses.
 A historical record of the organization’s activities
during a given period.
 What can a budget
accomplish?
 It can help refine goals based on realistic
resources.
 It can compel members of the organizations to
use funds efficiently.
 It can provide accurate information to adjust,
analyze, and evaluate programs and activities.
 It can provide a historical reference to be used
for future planning.
 It can be an aid in decision making.
 Steps to Develop a budget
Step 1: Begin preparations a month or
more prior to the close of the current year
(end of spring semester).
 This will allow for the new administration to
easily transition without worrying about
approving their budget for the next year.
 Steps to Develop a budget, cont’d
Step 2: Prepare an outline of the organization’s planned
activities for the upcoming year.
 This allows your organization to determine what plans you wish
to do for the upcoming year (take a trip, have a dinner, publish
a newsletter, show movies, etc.)
 Many times committee chairs, executive officers, and sometimes
group members will make proposals for the activities might be
considered during the organization’s fiscal year.
 These proposals are presented to the budget committee, which
might be a separate group chaired by the treasurer or other
organization member in the case of a larger group, or the executive
committee in the case of a smaller group.
 This step is very important since programs require money, and
to a great extent they drive the budget.
 Steps to Develop a budget, cont’d
 Step 3: Determine available funds (carry over balance
from previous years, cash on hand and funds in the
bank, interest, etc.)
 Step 4: Do careful studies of funding sources, costs,
estimated and probable fundraisers.
 Step 5: Estimate expected income and when it is
expected to be available (dues, t-shirts, sales, etc.)
 Step 6: Define needed expenses (advertising/printing,
supplies, etc.)
 Step 7: Get price quotations on certain expenditures,
delegate certain responsibilities to members.
 Steps to Develop a budget, cont’d

 Step 8: Rank the order of expenditures by their importance.

 When doing this step the organization needs to consider which activities
are the wisest expenditure of funds.
 Step 9: Negotiate, as necessary, eliminate less essential
expenditures or limit expenditures.
 Step 10: Revise, review, coordinate, cross-reference, and then
assemble into a final budget; the budget must be flexible to
anticipate conditions which might have been overlooked during the
planning process.
 This allows the organization to project their revenues and expenditures
for the next fiscal year.
 Many times once the revenues and expenditures are projected they are
presented to the executive group for initial review.
 Changes to the budget can be made based on recommendations of the
officers.
 Assuming that the revised budget is approved, it is then presented to the
organization’s members for adoption.
 Keys to managing a budget
 Once approved, adopted and prepared, it should
be closely managed.
 The budget is the organization’s financial road map
for the year.
 It can be changed if circumstances dictate, but it
would require a vote according to the process
prescribed in the organization’s constitution or by-
laws.
 Set and maintain a minimum cash balance.
 Formulate general policies and procedures
needed to achieve objectives.
Keys to managing a budget, cont’d
 Keep an accurate log of financial transactions
(income and expenses): maintain your
organization record book (check and balance
records periodically).
 Contemplate on having the treasurer preparing
periodic reports related to the budget and presents
them to the executive officers and members.
Keys to managing a budget, cont’d
 The treasurer should produce monthly operating
statements.
 In the report all transactions that have occurred since the
previous statement should be included.
 At the end of each statement a balance should be reported by
the treasurer.
 The monthly statement should be reconciled with the year-
to-date activity of the organization so that a clear picture of
the organization’s financial position can be established.
 A review of the statement will provide the income of the
organization, its expenses, and the organization’s cash balance.
Keys to managing a budget, cont’d
 Control cost – allow only approved expenditures.
 Assess budget at any given point of time during
the budgeted period.
 After the budget period has elapsed, determine
the outcome of each expense and revenue.
 Judge and review actual cost in order to
establish priorities for the next budget period.
 “We’re In the Money”
 Managing the budget and being successful
in balancing the spending will allow your
organization to transition easily.
 Having a correct budget and knowing how
much monies your organization is able to
work with will allow for your organization
to have less stress and more fun.
Example Budget
Previous Year Current Year
Revenue
Dues and activity fees ____________ ____________
Student government allocation ____________ ____________
Services rendered ____________ ____________
Commissions from machines ____________ ____________
Sales ____________ ____________
Fundraisers ____________ ____________
Program receipts ____________ ____________
Other receipts ____________ ____________
Prior year carried forward ____________ ____________
TOTAL REVENUE ____________ ____________
Expenses
Personnel services ____________ ____________
Salaries ____________ ____________
Hourly wages ____________ ____________
Fringe benefits ____________ ____________
Workers compensation ____________ ____________
Social Security ____________ ____________
Insurance ____________ ____________
Operating expenses ____________ ____________
Telephone line charge ____________ ____________
Long distance ____________ ____________
Other communications ____________ ____________
Office supplies ____________ ____________
Printing ____________ ____________
Postage ____________ ____________
Equipment rental ____________ ____________
Equipment repair ____________ ____________
Program expenses (Develop budget for each program)
Newsletter ____________ ____________
Speakers ____________ ____________
Travel ____________ ____________
Outstanding debt ____________ ____________
Miscellaneous expenses ____________ ____________
Capital
List by item ____________ ____________
Contingency ____________ ____________
TOTAL EXPENSES ____________ ____________
BALANCE ____________ ____________
Sample Balance Sheet
Date: ___________________

Amount
Assets
Cash on hand ____________
Accounts receivable ____________
Savings accounts (by number) ________ ____________
________ ____________
Equipment (fair market value) ____________
_______________________________ ____________
_______________________________ ____________
Other property ____________
_______________________________ ____________
_______________________________ ____________

TOTAL ASSETS

Liabilities
Accounts Payable ____________
Long-term debts ____________
_________________________________ ____________
_________________________________ ____________

TOTAL LIABILITIES ____________

NET Value of Organization ____________