Budget Planning Checklist

Budget Planning Checklist

Step-by-step guide for annual budget preparation

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1
Preparation Phase (3-4 months before fiscal year)
Begin budget planning early to allow time for thorough analysis, stakeholder input, and multiple revisions. This phase establishes the foundation for your entire budget process.
Review previous year’s budget vs. actual performance
Analyze variances to understand what worked well and what didn’t. Identify patterns in revenue and expense timing.
Due: 4 months before fiscal year
Gather financial statements from past 2-3 years
Collect audited financials, monthly reports, and cash flow statements to identify trends and establish baseline data.
Due: 4 months before fiscal year
Update strategic plan and program goals
Ensure budget aligns with organizational priorities. Review mission, vision, and strategic objectives for the coming year.
Due: 4 months before fiscal year
Create budget timeline and assign responsibilities
Develop detailed schedule with deadlines for each phase. Assign specific tasks to staff, finance committee, and board members.
Due: 3 months before fiscal year
Review and update budget policies
Update financial policies including reserve requirements, approval processes, and budget modification procedures.
Due: 3 months before fiscal year
2
Revenue Planning (2-3 months before fiscal year)
Develop realistic revenue projections based on historical performance, confirmed commitments, and strategic fundraising plans. Conservative estimates prevent budget shortfalls.
Analyze historical revenue trends by source
Review 3-year trends for individual donations, grants, earned income, and special events. Identify seasonal patterns and growth rates.
Due: 3 months before fiscal year
Confirm committed grant funding
Document all confirmed grants with award amounts, terms, and payment schedules. Include only guaranteed funding in projections.
Due: 3 months before fiscal year
Develop individual donor projections
Analyze donor retention rates, average gift sizes, and acquisition goals. Plan appeals calendar and major gift cultivation strategies.
Due: 2.5 months before fiscal year
Project earned revenue from programs and services
Calculate fee income based on program capacity, pricing strategies, and market demand. Consider economic factors affecting participation.
Due: 2.5 months before fiscal year
Plan special events and campaigns
Budget for annual gala, walk/run events, and capital campaigns. Include gross revenue and event expenses in calculations.
Due: 2 months before fiscal year
Create conservative and optimistic revenue scenarios
Develop multiple scenarios to understand revenue risks and opportunities. Use conservative projections for final budget.
Due: 2 months before fiscal year
3
Expense Planning (2 months before fiscal year)
Build detailed expense budgets that support program goals while maintaining operational efficiency. Include all necessary costs and build in appropriate contingencies.
Calculate personnel costs with benefits
Include salaries, health insurance, retirement contributions, payroll taxes, and professional development. Factor in planned raises and new positions.
Due: 2 months before fiscal year
Budget program-specific expenses
Detail direct costs for each program including supplies, travel, training, participant costs, and equipment needs.
Due: 2 months before fiscal year
Project administrative and overhead costs
Include rent, utilities, insurance, accounting, legal, technology, and office supplies. Research price increases and contract renewals.
Due: 2 months before fiscal year
Plan fundraising and development expenses
Budget for donor management systems, marketing materials, event costs, and development staff time. Target 15-25% of contributions raised.
Due: 1.5 months before fiscal year
Include capital expenditures and equipment
Plan for technology upgrades, facility improvements, and equipment replacement. Consider financing options for major purchases.
Due: 1.5 months before fiscal year
Add contingency reserves
Include 3-5% contingency for unexpected expenses. Plan for emergency repairs, staff turnover, and economic uncertainties.
Due: 1.5 months before fiscal year
4
Review and Approval (1 month before fiscal year)
Conduct thorough review with stakeholders to ensure budget accuracy, feasibility, and alignment with organizational goals. Allow time for revisions before final approval.
Staff leadership review and input
Present draft budget to executive team and program managers. Gather feedback on feasibility, priorities, and potential adjustments.
Due: 1 month before fiscal year
Finance committee detailed review
Present comprehensive budget with assumptions, rationale, and supporting documentation. Address questions and incorporate feedback.
Due: 3 weeks before fiscal year
Calculate key financial ratios
Verify program expense ratio, fundraising efficiency, and reserve adequacy meet board policies and funder expectations.
Due: 3 weeks before fiscal year
Prepare board presentation materials
Create executive summary, variance analysis, and visual presentations that clearly communicate budget priorities and impacts.
Due: 2 weeks before fiscal year
Board budget approval meeting
Present budget to full board with opportunity for questions, discussion, and modifications. Document approval in board minutes.
Due: 1 week before fiscal year
Finalize budget documentation
Prepare final budget document with board approval, detailed assumptions, and implementation guidelines for staff.
Due: Start of fiscal year
5
Implementation & Monitoring (Ongoing)
Put budget into practice with regular monitoring, reporting, and adjustments as needed. Maintain financial discipline while remaining flexible for strategic opportunities.
Set up budget tracking systems
Configure accounting software for budget comparisons, variance reporting, and department-level tracking. Train staff on budget monitoring.
Due: First week of fiscal year
Establish monthly reporting schedule
Create format for monthly budget vs. actual reports. Schedule regular reviews with department heads and finance committee.
Due: First month of fiscal year
Monitor cash flow projections
Track actual cash receipts and disbursements against projections. Update forecasts based on actual performance and timing changes.
Due: Monthly throughout year
Review and approve budget modifications
Establish process for budget amendments and transfers. Ensure proper authorization levels and documentation for changes.
Due: As needed throughout year
Quarterly board financial reports
Present comprehensive financial updates to board including budget performance, cash position, and any needed adjustments.
Due: Quarterly throughout year
Prepare for next year’s budget cycle
Document lessons learned, update budget assumptions, and begin planning for next fiscal year’s budget process.
Due: 6 months into fiscal year

💡 Budget Planning Tips

Start the budget process early – at least 3-4 months before your fiscal year begins
Use conservative revenue estimates and include contingency funds for unexpected expenses
Involve program staff in budget development to ensure realistic operational projections
Create multiple scenarios (conservative, realistic, optimistic) to understand potential outcomes
Focus on cash flow timing – when money comes in vs. when it goes out
Document all assumptions so you can reference them during the year
Plan for board presentation with clear visuals and executive summary
Set up systems for regular monitoring and variance analysis throughout the year

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