Every nonprofit organization benefits from accurate budgets that provide a roadmap for planning and making decisions. And yet, many busy nonprofits struggle to create an effective budget and adjust it in a timely manner.
Whether your year-end is June 30 or December 31, these tips for budgeting can help you stay on track to achieve your goals.
Procrastination is perhaps the biggest challenge that must be overcome to create a reliable budget. It’s never too late to make a budget, but ideally you should start two to three months before you start your next fiscal year.
Gather the numbers you need
To the greatest extent possible, budgets should be based on numbers, not feelings. Gather all the historic data you can, delegating the information collection as possible to department heads such as your development manager and program directors.
Where you have to make guesses or assumptions, note that in the budget. Flagging those instances will help you keep an eye on what happens, so you can quickly make adjustments during the year.
Automate your processes
Spreadsheet-based accounting is time-consuming. To speed up your budgeting process, consider investing in best-in-class Sage Intacct accounting software, which automates many processes and allows you to quickly perform many advanced tasks, including:
- Setting budgets for each event, campaign, program, and funder
- Modeling calculations, such as projected cash, sales, revenue recognition options, or headcount expenses
- Creating scenarios to perform “what-if” analyses, without affecting your current budget
Revisit your budget every month
When was the last time you reviewed your current budget? If it’s been more than a month, you could be drifting away from your strategic plan. To reduce anxiety and stay on track, put monthly budget reviews on your calendar.
Comparing your actual numbers with your budget will help eliminate unpleasant surprises. Making small adjustments throughout the year is to be expected, and doing so will ensure that you are making informed decisions throughout the year.
Get the support you need
Insero & Co. is a public accounting firm with decades of experience working with businesses and nonprofits of all sizes. Our experts are available to provide consulting, budget support, and other remote services to help you sustain your mission through this year and beyond.