Budget, Preparing a

Managing finances effectively usually requires the preparation of a budget, which can typically be approached in the following way.
• Identify and define the aim of objectives of the budget. This might include considerations such as to increase savings, reduced expenditure, the purchase of new equipment, the taking on of new staff or facilities, readjustment due to a change of quality outcomes for a sports surface, or increased expenditure. Having a clear and measurable indication of the outcome to be achieved will help to set a realistic budget.
• Distinguish between essential requirements and those which would be desirable but are not essential in achieving the outcome.
• Collect all the relevant information for what is required to achieve the stated requirement and apply costs to these. This can include a detailed work programme with to determine expenditure, so include all associated materials, equipment, staffing, contract hire requirements, repayments, and other financial obligations. All income will be identified, if applicable, whether from the use of facilities, if any contract work is carried out, investments or savings. This provides a detailed oversight of all financial implications in meeting the desired requirements.
• If there is a large discrepancy in the available budget and the essential and desirable requirements, prioritise the desirable requirements and eliminate the least desirable first to see how the budget can be balanced, ideally ensuring all essentials are achieved.
• Create a time based, such as monthly, budget plan for a year, or greater. Ensure a detailed breakdown of where the expenditure goes, and income is received from as this will help to better the manage the budget on an operational basis. Whilst this and the following stages are the operational aspects of a budget, they can be seen as part of the process of preparing for the next budget. These stages provide valuable insight into the practicalities of managing a budget and therefore what needs to be considered when a new budget is prepared.
• Monitor, on a regular basis, income and expenditure and relate this to the planned income and expenditure. Some variation from the planned figures will typically arise but by accurate monitoring then opportunities for short-term adjustments can be made to ensure the budget finances stay within acceptable variation limits.
• Keep records and receipts for all expenditure, ensuring these can be justified and they comply with organisational and regulatory requirements.
• Review and adjust, if required, the budget at defined periods throughout the year. Consider how working practices and processes can be adapted for improved efficiency and effectiveness as a part of ongoing continuous improvement. Also, consider if new or additional sources of income can be achieved during the budgetary period.
• Ensure adequate monies are made available for investments and savings, to help better cope when times become lean and challenging.