19 January 2021
Budget is the annual financial plan of estimated expenditures and receipts for the ensuing year. It is the most important planning tool.
It is a continuation of last year’s budget. It should form the basis of next year’s annual statement of accounts which should be audited against the entries of each item in the budget for that particular year.
If there is a prescribed format for a housing organisation as per law, you must prepare the budget in it. If not, you can take a format from a government organisation, local body or a registered society as a model form and modify it for your purpose.
A budget should include every income or receipt, expenditure or other proposed payment, debt or loans, contingent charges, capital expenditure, deposits, liabilities etc.
For each one of this you can include a detailed statement as part of the overall budget. But the expenditures and incomes should show an overall zero sums on both sides.
A budget usually includes three columns: one for budget estimate for the current year, another for actual amount expended for the current year, and the estimate for the ensuing year.
In short, the budget should envision every item of expenditure meant for the ensuing year on capital items, revenue items, contingency, and other items.