Budget Planning Process
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A Budget Planning Process is an organizational planning process to solve a budget planning task.
- Context:
- output: a budget plan.
- It can be supported by a Budget Planning System.
- It can (typically) involve a Budget Forecasting Task (with expenditures forecasting and revenues forecasting).
- …
- Example(s):
- Counter-Example(s):
- See: Organizational Budget Planning Process.
References
2023
- chat
- Q: What is a budget plan, and what is the process to create one?
- A: A budget plan is a document that outlines the expected income and expenses of an organization over a specific period of time. It is an essential tool for financial planning and management that allows organizations to allocate resources effectively and monitor their financial performance.
The process of creating a budget plan typically involves the following steps:
- Determine the time frame: The first step in creating a budget plan is to determine the time frame for which the plan will be created. This could be a fiscal year, a calendar year, or any other period of time that is relevant to the organization.
- Gather financial data: The next step is to gather financial data from previous years or other relevant sources to identify income and expenses for the period being planned.
- Identify income sources: The next step is to identify all possible sources of income for the period being planned, such as sales revenue, grants, donations, or investment income.
- Estimate expenses: The next step is to estimate all the expenses that the organization will incur during the period being planned. This may include fixed expenses such as rent, salaries, and insurance, as well as variable expenses such as marketing, supplies, and travel.
- Categorize expenses: Once all expenses have been identified and estimated, they can be categorized into different areas of the organization, such as marketing, operations, or administration.
- Allocate resources: With income and expenses identified and categorized, resources can be allocated to different areas of the organization based on priority and need.
- Review and finalize: Once the budget plan has been drafted, it should be reviewed by relevant stakeholders, such as managers or finance professionals. Any necessary adjustments or changes can be made before finalizing the plan.
- In summary, creating a budget plan involves gathering financial data, identifying income sources and expenses, categorizing expenses, allocating resources, and reviewing and finalizing the plan. By following this process, organizations can create a financial plan that helps them achieve their goals while managing their resources effectively.
2013
- http://www.nonprofitaccountingbasics.org/reporting-operations/budgeting-process
- QUOTE: The budget process is the way an organization goes about building its budget. A good budgeting process engages those who are responsible for adhering to the budget and implementing the organization's objectives in creating the budget. Both finance committee and senior staff participation is built into the process and a timeline is established leaving adequate time for research, review, feedback, revisions, etc. before the budget is ready for presentation to the full board. The annual budgeting process should be documented, with tasks, responsibility assignments and deadlines clearly stated. A good budgeting process also incorporates strategic planning initiatives and stipulates that income is budgeted before expenses. Fixed costs are identified and related to reliable revenue. Budgeting decisions are driven both by mission priorities and fiscal accountability.
2010
- http://www.nonprofitaccountingbasics.org/reporting-operations/budgeting-process
- QUOTE: The budget process is the way an organization goes about building its budget. A good budgeting process engages those who are responsible for adhering to the budget and implementing the organization's objectives in creating the budget. Both finance committee and senior staff participation is built into the process and a timeline is established leaving adequate time for research, review, feedback, revisions, etc. before the budget is ready for presentation to the full board. The annual budgeting process should be documented, with tasks, responsibility assignments and deadlines clearly stated. A good budgeting process also incorporates strategic planning initiatives and stipulates that income is budgeted before expenses. Fixed costs are identified and related to reliable revenue. Budgeting decisions are driven both by mission priorities and fiscal accountability.
Steps for developing a good budgeting process:
- Write it down. …
- Decide who should be involved and when. …
- Establish an annualized timeline. …
- List specific tasks with specific responsibility assignments. …
- Ensure that budget line items and accounting line items are in sync. …
- Develop worksheets, templates, and tools that promote inclusion of all relevant budget components and facilitate "what if" scenarios. …
- Adopt policies for adhering to budgets, handling variances, approval authority, etc. …
- QUOTE: The budget process is the way an organization goes about building its budget. A good budgeting process engages those who are responsible for adhering to the budget and implementing the organization's objectives in creating the budget. Both finance committee and senior staff participation is built into the process and a timeline is established leaving adequate time for research, review, feedback, revisions, etc. before the budget is ready for presentation to the full board. The annual budgeting process should be documented, with tasks, responsibility assignments and deadlines clearly stated. A good budgeting process also incorporates strategic planning initiatives and stipulates that income is budgeted before expenses. Fixed costs are identified and related to reliable revenue. Budgeting decisions are driven both by mission priorities and fiscal accountability.