What are budgets?

p What are budgets (NGO

What are budgets

Once the resources necessary in achieving the organization 's objectives have been identified , these are then translated to monetary terms . The various sources from which the necessary funds can be taped are also identified . This process is known as budgeting which involves stating the various sources from which money is to be raised during a particular period and the activities on which the money will be utilized . Simply stated , a budget is a quantified , planned course of action over a definitive time period

. It is an attempt to estimate inputs and the costs of inputs along with associated outputs and revenues from outputs (What

What are the benefits of a budget ? Especially , as related to a Non-profit organization

A budget is an important document for assessing the financial requirements of an NGO

A budget should normally be prepared for a period of 12 months , which may be financial year or calendar year . If the activities are being carried out by various sections or branches , each branch should prepare a budget for its operations which should then be consolidated at the central level . In preparing the budget , the income (sources of funds and expenditure (application of funds ) is studied and taken note of , and both sides are balanced showing deficit or surplus . If there is a deficit then the sources from which it shall be met or the measures to reduce expenditure is indicated . We get to know the correct position well before the beginning of the financial year . This is the main benefit of the budget . A budget is prepared well in advance it is realistic and accurate while also it provides for certain unforeseen or abnormal expenditure

Three main functions of a budget : Planning , controlling and administering

Planning : Planning is a conscious thinking relating to creating logical means of achieving desired goals . It fosters the thinking of a group of people , poised for development , and synchronizes their thoughts with their needs and abilities for a well-considered action , resulting in their welfare . Planning is necessary for providing effective services constructing infrastructure , setting up an administration , organizing conferences , raising funds etc . The basic principles of planning are (i ) Participation at all levels : Planning involves discussion with all concerned departments and individuals . It should not just come from the top . Planning ensures participation at all levels instead of one man at the top deciding everything on his own thinking (ii ) Continuity Planning is a continuous process

Consistent review and introspection are required , so that any pitfalls in the plan are removed if the plan is not achieving the targets Planning thus has to be done on a continuous basis (iii ) Objectivity : In to make a plan effective , its objectives must be stated in advance , in clear and unambiguous terms (iv ) Evaluation : Effective methods of evaluation should be used to ensure the effectiveness of planning

Controlling : Controlling means , systematic arrangement and allocation of resources (including human , goods , services and financial resources with a view to...