Why do I need to prepare a budget
In my previous post, I mentioned being part of a local voluntary committee, and our efforts to bring a Christmas market to my local town. It’s all going well, but as we near our first year end, it has become apparent to me how important it is for us to plan better for the following year.
Like many voluntary organisations, we are probably still finding our feet. While I keep track of the monies in my role, what I do not have is the full picture of what monies will be spent. To be fair none of us do, as this is the first time we have organised this event and none of us within the organisation have prior experience of such an event. However, a budget is exactly what will bring us together and help us focus for next year. By the end of the Christmas period, we will know what costs we have incurred to host the market and these can be the basis for discussions for the coming year. Then, with a budget in place, we can start to plan for what we need to achieve and of course we can keep a control on things. If you read any management accounting textbook you will see pros and cons of budgeting. To me the biggest advantage of preparing a budget in this small voluntary organisation is that we can all talk from the same page – i.e. the communication value of the budget.