Whilst it is not the most glamorous aspect of running an organisation, budgeting remains a cornerstone for the growth and stability of small businesses and charities. From planning and forecasting to aligning organisational values with financial goals, budgeting plays an indispensable role. We outline below the multifaceted benefits of budgeting, and how integrating modern tools like online accounting software can lead to a more streamlined and effective approach.
Planning Success with a Budget
A budget is a road map for businesses and charities. It maps out what they want to achieve and helps them get there by planning how to use resources and money. A budget helps an organisation stay on track and aim for success.
Keeping Track of Money
By tracking income and expenses, a budget makes sure money is used appropriately. It prevents fraud and misuse of funds, making it a vital tool for managing finances.
Talking to Stakeholders
Budgets help organisations tell donors, regulators, auditors and others about their financial situation. They show that the organisation is responsible and transparent.
Aligning Values and Finance
Using a budget helps businesses and charities align their financial decisions with their goals and values. This connection helps identify new opportunities and challenges and prepares them for unexpected events.
Predicting the Future
By looking at past actions and current plans, budgets forecast what's next for income and expenses. This insight helps organisations be flexible and make smart choices.
Using online accounting software like Liberty Accounts to prepare your budget
The budgeting features of Liberty Accounts are designed to provide flexibility, precision and ease of use with support for funds which is essential for charity trustees demonstrating good custodianship. Liberty Accounts supports multiple budgets and allows for the selection of accounts to budget, as well as offering the ability to create budgets by fund, department, or activity. Additionally users can apply seasonal weightings for income and expenditure, and define expected periodic rates of change. When starting out in Liberty you can create budgets through direct input of figures, but as your accounting data builds up in Liberty you can start to generate budgets based on historical data, applying rules to modify the figures, and finally making direct changes as required.
If you are interested we have a separate article about how to use our budgeting module
Raising Funds Efficiently
Budgets help figure out how much money is needed from donations, events, and more. They also measure the success of each money-raising effort, making them more efficient and effective.
Checking Financial Health
Budgeting checks if an organisation is financially stable and prepared for the future. It identifies risks and opportunities, allowing for corrective actions if needed.
Conclusion
Budgeting isn't just about numbers; it's a vital tool for small businesses and charities. It guides them in managing money wisely and achieving their goals. Using online software integrated budgeting features make the entire budgeting process more efficient and tailored to specific organisational needs. From planning to checking financial health, budgeting plays a key role in success.
Register for a free trial of Liberty Accounts and explore our budgeting feature to see how much time you will save.
