Creating an appropriate budget for your association requires careful thought and consideration.
All organizations, whether non-profit or for-profit struggle to find and set an appropriate budget. No matter the tax status of an association, staying viable is typically essential! A critical part of association management is the annual budget creation process. While the annual budget might seem like an annual headache, it is absolutely essential that you create a budget with transparency, efficiency, and accountability in mind. Here are some of the considerations that you need to make as part of your association’s annual budget creation process.
Start Early
Budget creation can take a great deal of time, so you should start preparing it far in advance. Keep in mind that the first draft will need to make it through multiple internal and external reviews, revisions, edits, and presentations for final approval. The association management team should meet with the Board of Directors before starting to create the budget so that they have a good idea of the organization’s goals and mission before assigning line items.
Work Together
Once you have a precise idea of what the Board wants, you need to cooperate with all of the different committees, vendors, and residents to determine the right revenue and expense projections. Collaboration also takes some time, but it is essential to create a budget that is easy to approve the first time. As you prepare the budget, you should make sure that you talk to all of the stakeholders involved so that you can clearly and concisely explain why values are what they are in a meeting.
Budgets Are Living Documents
Finally, keep in mind that budgets should always be active parts of your association management. For a budget that is useful and practical, it should be constantly checked against projections. If the revenue goals aren’t being met, strategizing needs to occur before the end of the year! By keeping the budget a topic of discussion throughout the year, there will be fewer surprises along the way.
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