October 23, 2024
You Need a Budget
No, we aren’t promoting the YNAB app with this post. {But we have heard good things about it for your personal finances.} No, this post is about your organization’s budget. Getting ahead of the curve of this year-end task.
Not sure what year-end tasks we are talking about? Check out this post on all the extra items you need to do at the end of the fiscal year, which for many of us is also the end of the calendar year.
Creating a budget
Instead, we want to highlight the importance of creating, sticking to, and making notes for the next year. My personal favorite tip for budgeting is always use the correct general ledger number when assigning money. Keeping your reporting of expenses in accurate accounts is always the best option to get a true picture of your expenses.
Maybe a ministry flourished this year, but it won’t next year, that’s alright, you went over budget this year, but you know you don’t need to up the amount for next year. Or maybe that ministry is continually flourishing over several years, it’s time to give them more piece of the pie! Celebrate it. That may make changes to other areas based on current trends of your finances – and that’s what we are looking for. Not that you stayed under your arbitrary number. We want to see where the money is actually going.
Two of our popular posts on budgeting include: a budget for every occasion and purpose driven budgeting. You can read those at the links below.
Also, don’t forget about our podcast series on Budgeting. Where we talk about assigning dollars, income revenue, budgeting basics, and setting goals. Similar content as the blog posts, only in audio form – and with bonus material.
Budgets are for your financials
While we are talking about budgets, we can’t not talk about financials. The whole point of the budget is to plan where you want the money to go. The financials help you see where the money went – and help you plan for the next year. One of our posts goes into more details on the importance of financial statements: Three Components of Quality Financials. Plus, in that post is a link to our four-part podcast on financial statements.
Your accountant needs all your information
If you’ve made it this far in this post, you understand the importance of the budget. So, while we have you, we have one more small thing to go over. Since you (now) know about the importance of accurately reporting where each dollar is going, by choosing the correct general ledge account; that includes one more thing.
For MM clients, your client services rep and accountant needs all your information each week and/or each month. We can only produce accurate reporting if we are given accurate information. (Is this starting to sound familiar?)
Just as you need all the information to create your personal budget (each receipt from the week/month), the person creating your financials needs all the financial information. Nothing should surprise them when they go to reconcile the bank account. Again, just as you don’t want any surprises when you check your personal online bank.
This makes everyone’s jobs easier and helps leadership make better financial decisions. which is what our mission statement is all about… providing Expertise that brings Clarity to finances enabling leadership to have Confidence in decision making.
Stay Connected