A church or non profit organization should have a budget. A budget is a useful metric for evaluating the annual performance of church activities this site. As long as the budget is within acceptable limits, a budget empowers workers to act autonomously.
Budgeting can be difficult when you first start to create one. Although it might seem like there isn’t enough money to go around, this can be a problem. However, even small amounts can be extremely useful when managing money. The freedom that comes with having a planned spending plan will increase as your budget structure changes. Where do you begin to build a budget? The best place to begin is usually a church with a history of past spending. Even better is a history of spending over several years. There may be some spending anomalies in one year’s history such as one-time purchase or an emergency that does not recur each year. The expenses can easily be averaged over several years, so it should be possible to determine the likelihood of regular spending habits.
Start by setting a monthly spending pattern. Assess the recurring expenses. They are often called the “fixed costs of an organization”. These include salary, utilities and supplies for office maintenance, as well as scheduled events. These expenses often make up ninety percent or more of an organization’s overall spending. The remainder of spending can be spent on one-time items, such as replacing equipment or taking advantage of new opportunities. There isn’t much money to spend on these items. A multi-year plan must be established for salary increases and new purchases. A chart-of-accounts can be used to assign a budget amount to each item on the list. If there is no list, it is possible to create one.
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