Lesson 3 – How to put the budget into practice

To put the budget into practice, start with the following budget types:

Net Zero Budget: Revenue – Expenses = zero. This is necessary for restricted grants where you spend it or lose it.
Net Operating Loss Budget: Expenses exceeds Revenue – Loss is covered by prior year net asset carryover, or unrestricted revenue.
Net Surplus Budget: Revenue exceeds Expenses. Surplus must come from unrestricted revenue or grants.

Here are some budget tips:

  • Utilize budget reports to measure actual revenue and expense against the planned budget.
  • Determine how well you are tracking your financial plans.
  • Prepare future budgets.
  • If you constantly change budgets because of variances, it renders the budget useless.
  • Modify budgets only when there are major changes such as new programs, sites.