How to put together a budget
What is a budget?
A budget is your group's money plans for the coming year. It helps you
to make your money last for a year by splitting it into smaller chunks.
This helps you to see how you are spending your money throughout the year.
What is a financial year?
A financial year is a 12 month period of time (not necessarily January
- December).
Preparing the budget
It will take time to do the work needed to get the right figures. Start
work as soon as you can on the budget, so that when you need to apply
for money it will help you to do it more quickly.
Step by step
- What does your group want to achieve (These are your aims)?
- How much money (finance) will you need to achieve these aims?
- Work out what your budget headings will be:
- They are the basic costs that every group has, such as postage, paper and envelopes, rent, heat and electricity.
- Think again about extra costs, like transport. See checklist below.
- Work out how much money you need under each heading.
- Don’t guess how much things cost, why not speak to other similar
groups to find out what money they spend? It is easy to find out the
cost of things you might need. Why not use a catalogue or ‘phone
a shop?
Local Authorities and most trusts divide their grants into two things:- ‘Capital’ - one-off payment for equipment or setting up costs, and;
- Revenue’ - these are the costs to keep your group running.
- When thinking of things for next year, don’t forget they may
be more expensive.
Now look at the figures again. Try to think, have you left anything out? Be careful you don’t spend more than you’re expecting to get!
Using the budget
Budgets aren’t just there for you to get a grant. They help you
see whether you are spending your money as you had planned. They can warn
of spending too much, too little, or perhaps spending in the wrong areas.
Every month or so, check how you are spending your money. If you are not spending your funds as planned, you must find out why. Does it mean that you are not doing the things you wanted to do or do you, perhaps, need to rethink your budget?
Future budgets
About nine months into the financial year, you should start working on
next year’s budget. You will, by then, have a clear idea of how
your spending and the budget match up, and what changes you will need
to make for the next year.
You will also have time to do the work involved before the new financial year starts. If you are making changes in the way you do things or if you have decided that equipment needs replacing, make sure that you cost the changes correctly into the new budget.
Suggested budget heading checklist
INCOME (money you receive)
Grants - For capital - For Revenue
Subscriptions
Donations
Sales of publications etc
Fundraising event
EXPENDITURE (money you spend)
Capital
Office Equipment
Computer Equipment
Minibus; etc
Revenue
Wages/National Insurance
Rent
Heat and light
Postage
Printing, stationery
Telephone
Training
Transport and travel
Repairs/maintainence of equipment
Cleaning
Compiled by the Information Unit (UK)
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Links- Tips on financial management
- Tips on fundraising
- Arts
and Business Council, Chicago
http://www.artsbiz-chicago.org/bva.htm