Get Ready for Annual Budgeting

It’s that time of year when we start setting timelines with our nonprofit clients for annual budgeting. For most clients who operate on a calendar year (1/1-12/31), we want to have internal discussions about revenues and expenses in October, put together a solid draft budget for your finance committee in November, and get a final budget approved at a December board meeting (at the very latest early January if the holidays make it difficult to get a quorum). We do zero-based budgeting which is a method of budgeting where all expenses are justified for the upcoming year rather than simply taking what was spent last year. The same goes for revenue. 

Personnel budgeting is most important for the majority of nonprofits as people deliver services to the community. Along with that, we need to understand how organizations pay for the people.

It is best to balance your budget on an annual basis but certain situations may require surplus budgeting. That would include retiring debt or establishing reserves. Some organizations may be able to justify a deficit budget if past reserves are available and new unfunded programming is being attempted. 

If you are looking for assistance with annual budgeting, we would love to help. The start of managing money with mission is a solid annual budget.