2. How to do Budgets

3. What is a Budget? A budget is a financial representation of a church’s mission and strategic goals A plan translated into money and a tool for allocating resources and implementing strategic plans A budget is a financial representation of a church’s mission and strategic goals A plan translated into money and a tool for allocating resources and implementing strategic plans It helps to allocate and maximise use of resources and ideally identifies financial problems that could arise.

4. Plan!!

5. Why do we need to Budget? A planned and well thought through budget increases the likelihood of finances being successful A budget helps to set strategic goals A budget facilitates co-ordination and co-operation between people in the church

6. Why do we need to Budget? Periodic comparisons between the budget and actual financial performance can help signal problems early on Budget based on historical information doesn’t always keep up with a rapidly changing environment “Necessary to work within an agreed budget” – Charity Commission 12/03 – CC8

7. Are there disadvantages? Presence of controls may stifle creativity Budgets created by just one person may lack ownership by others Because when budgets are created there are many unknowns, natural tendency by treasurers is to emphasise cost control

8. Are there disadvantages? Budgets not always easy to implement, may not be accepted as useful by ministers and other leaders in the church

9. Where do we start? Budget normally starts with the treasurer or a small number of people to be later approved by the deacons and ultimately the church meeting A draft budget in the early stages enables opportunities for people to ask for proposed activities to be included A budget shared is a budget owned

10. How to begin? Use of spreadsheet or cash book Make a list of all the expenditure headings Make a list of all the income headings Use your previous years’ accounts to help you prepare lists Be prepared – access to information Make notes of your assumptions

11. What next? This spreadsheet is available on the BUGB website for you to download

12. Expenditure Budget This spreadsheet is available on the BUGB website for you to download

13. Who are the audiences? Once draft prepared, allow time for reflection, check assumptions Have you erred on side of cost control or have you been creative? Anticipate changes going on in the life of the church Now ask others for their input and views Use graphs if they help your audience

14. Graphs (examples)

15. Risk and Uncertainty Both are there! How to present the issues realistically without frightening everyone Income, expenditure and overall impact Know your church, understand the figures Answer questions with confidence Don’t be afraid to redraft!

16. And finally… Regularly review the church budget throughout the year against actual income and expenditure Approval of budgets should be done by deacons as trustees as well as the Church Meeting If doing accounts on computer, accounting software provided by Quickbooks, Sage and Paxton can help with budgets too at a touch of a button!