Preparing a budget is essential for effective planning and should run alongside the project plan.
Budgeting will help to:
- Estimate project costs
- Identify funding needs
- Inform financial decisions and avoid unexpected costs
- Plan for contingency
- Keep track of when payments need to be made
- Understand, in monetary terms, what your group is going to do
A budget will include
Expenditure: items to be paid for; overheads including leases/ rent, insurances, equipment, salaries, marketing and publicity costs. Office costs are also included such as phone, postage, travel costs for meetings and activities. Unknown costs should be estimated.
Capital or Revenue: expenditure items are classed as capital or revenue. Capital items will be equipment with a resale value for up to 2 years. Revenue items are day-to-day or running costs such as rent, admin and volunteer expenses as well as hidden costssuch as insurance or phone credit.
Income: Initially this will be income from grants already received and anticipated amounts from grants that may be awarded, membership subscriptions, fees and donations.
- Use a format such as a basic Excel spreadsheet, or simple tables with columns and rows.
- Quotes should be obtained for each item listed in your budget. Funders will require evidence of competitive quotes.
- Figures should be accurate, underestimating could lead to future financial difficulties and overestimating could affect funding application decisions.
- The budget should be regularly updated with changes to costs and income.
- Updates should be presented in the treasurer’s finance report to the group.
- The report should show actual income and expenditure against the budget figure.
WCVA - The Business Plan
WCVA - Business Planning
WCVA - Finding and getting money
WCVA - Managing money
NCVO - Finance
Resource centre - Budget for community groups