03 Lecture - BUDGETING TECHNIQUES Lesson 3 for EGMT531...

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    BUDGETING TECHNIQUES Lesson 3 for EGMT531
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    Learning Objectives What is a budget Purpose of budgets Importance of budgets Keys to effective budgets Budget calendar The budget process steps
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    What is a Budget? A budget is a road map of where you want to go and how you expect to get there. Budgets are used for: 1. Board Oversight 2. Goal Focus 3. Profit Planning 4. Financial Control
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    Purpose of Budgets Planning Communication Motivation Control and Evaluation
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    The Importance of Budgeting The more clear, accurate, and well- thought-out budgets are in the beginning, the more likely you will be able to: 1. Adjust plans, activities, and spending as needed 2. Spend money cost-effectively 3. Reach the specific goals you have set 4. Strengthen internal control system
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    Seven Keys to Effective Budgeting 1. Know your organization’s mission 2. Evaluate existing and potential programs 3. Assign responsibilities 4. Keep the process simple and realistic 5. Get your budget approved 6. Keep score 7. Review and revise as needed
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    Developing the Budgeting  Calendar The Five Steps 1. List major budget development tasks 2. Establish overall time frames and specific deadlines 3. Identify those responsible for each task 4. Seek review and comment from board and staff 5. Revise and distribute the final budgeting calendar
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    THE BUDGET PROCESS Budget Expenses Determine Programs and Activities Budget Revenues Assemble Draft Budget Review and Modify Draft Budget Present Budget Draft for Board Approval Monitor and Amend Budget
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    Step One:    Determine programs and activities As beginning steps in the budget process: The board has the responsibility to review the organization’s mission statement and its specific goals and activities for achieving the mission. The board should create a statement of strategic program and service priorities to guide resource and allocation decisions during the budget process. The Budget Director should arrange and staff any early strategic planning sessions with the board.
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    Step One:    Determine programs and activities (cont) Once the mission statement has been reviewed and strategic direction has been developed: The Budget Director (BD) working with the board
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This note was uploaded on 05/12/2010 for the course BUSINESS BS515 taught by Professor Johnson during the Fall '09 term at Drexel.

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03 Lecture - BUDGETING TECHNIQUES Lesson 3 for EGMT531...

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