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If you take a quick glance at today's topic it would seem as though we are going to talk about the movie industry. Executive Directors and the cast of a major production are not what we will be discussing albeit they are exciting topics. We want to present the concept of re-casting which is typically the responsibility of the executive director of a nonprofit. We will discuss what it is, and what is its importance.
What is a budget re-cast?
A budget re-cast is a re-design of the cast or frame of the budget. Your organization may utilize the zero-base analysis approach which eliminates unnecessary and low-value expenses at the budget level, however, recognize that a budget is a "live" analysis tool.
The budget is not static nor is it a duplicate of last year's budget figures (although last year's figure can be used as the foundation of a new budget re-cast). Re-casting requires assessing budget figures against actual data and making sound decisions based on the funds remaining.
How often is a budget re-cast?
Budgets can be re-cast at any time however it is most practical to re-cast them at the date that actual figures are permanently recorded and posted, typically at the month-end.
Nonprofits who acquire government grants find a budget re-cast standard for managing the funds that are distributed with strict adherence to allocation standards built into the terms of the grant. As a result, budgets are re-cast more frequently and prior to fund distribution.
What is the importance of budget re-casting?
This is what one expert in the field of nonprofit accounting stated, "If a manager were to instead allow expenses to follow the budget for several months [without re-casting], it is quite possible that a nonprofit could find itself out of business in short order".
Since nonprofits are supported by contributions from the public and generally what could be considered short-term funding, budgeting is a critical part of maintaining operations responsibly which means treating the budget as a "rolling and live" document, reviewing it often, and making adjustments as needed with prudence. A budget re-cast is essential to keeping ahead and staying ahead of cash shortfalls.
How can we help you?
Intuit QuickBooks is a great start for any nonprofit that does not have an accounting system to capture critical transactions and records. Intuit offers a suite of products either online (cloud-based) apps or desktop apps.
Their desktop versions require additional network installation yet provide more detailed transaction entry and additional reporting and budgeting tools. We have found that Intuit is the go-to accounting software app company that many starter enterprises use.
Intuit QuickBooks apps can be set up in a manner of hours or days giving nonprofit organizations an immediate upgrade to how donor contributions are handled, the ability to process follow-up acknowledge letters, set up budgets, re-cast budget against actuals, and prepare management and board reports within minutes and much more.
We are here for you:
We are here to help health and wellness nonprofit organizations grow and to grow abundantly by offering the setup and installation with accounting software, a powerful tool that helps guide nonprofit organizations throughout their journey. Visit our website for a list of all the services and products we offer.
Lights (check), camera (check), and action forward for: Your NFP Ship. Your NFP Compass. Your NFP Path w/Lenore, Inc.