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Budgeting: Who to involve, how to assess it and dealing with uncertainty

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Use this page to learn about who to involve in writing your budget, how to assess it and dealing with uncertainty.

Don’t be tempted to sit down and write a budget in isolation at your desk. You need different perspectives from:

  • the people who do the work – what’s involved in the delivery and the resources required
  • management – organisational financial position and priorities
  • fundraising – funder insights
  • finance – technical resource, check and balance

Assessing your budget

One purpose of a budget is to help you decide if a plan can go ahead. Once you have created a budget spreadsheet, you now have to step back and consider:

  • Do the numbers make sense? Are they consistent with what you know about the work?
  • Have you missed anything obvious?
  • Are you happy with the size of the budgeted surplus or deficit?
  • What can you do to change that if not?

Remember – if the numbers in your budget don’t work for you – you can’t just change the numbers. You have to change the work you’re planning to do too. If you need to reduce costs, think about what you’re not going to deliver as a consequence of that.

The other main purpose of a budget is to allow you to track progress during the year by comparing your actual spend with your budgeted spend. There’s more information about this in our management accounts section.

Budgets in uncertain times

When you’re making a plan you’re all too aware of the unknowns. For example, new work that’ll only happen if key grants come in or projects' that’ll have to close if their funding isn’t renewed.

That’s where the worry about getting the budget wrong comes in because it’s difficult to capture and share all those uncertainties in a single set of figures.

Instead, you can build your understanding of all those unknowns into the budgeting information, to make it a proper tool in the decision-making process by:

  • Creating a budget for the most likely outcome.
  • Adding a narrative to your numbers – something to give context, levels of probability for income, areas of uncertainty.
  • Creating best and worst-case scenarios – or at least a worst-case scenario so you have given that thought and worked out how you would manage that.

We often carry all the knowledge around with us but don’t quantify it. Setting out the worst-case scenario and knowing how we would tackle it is remarkably useful.

NCVO worked with Rachel Cooper at Welbeck accountancy to create this guidance.

This page was last reviewed for accuracy on 01 December 2022

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