Budget Advice For Membership Organizations

There is more to a budget than estimating the revenue and expenses of the membership organization.  The intent of a budget is to establish a financial plan based on both expected and unexpected matters that may arise.  It is also important for the membership's management to plan for an increase in savings in case revenue is too low or expenses are too high.

 

Because a budget is based on the unknown, a best practice is to overestimate expenses while underestimating revenue.  This would minimize any risk associated with a shortfall in cash and reduce the need to ask members for a special dues payment to replenish the bank account.

 

 

The more that can be known about the operations of your organization the easier it is to eliminate inconsistencies for your membership's budget. The easiest items to enter on the budget are the items with a fixed cost. Some of your contractors may provide their services for a fixed fee or for a contractual amount determined on an annual basis. Therefore, it is important to receive a fee confirmation from these vendors  prior to completing the budget. 

 

The next most important items on the membership budget are items that are a high dollar amount expense. These items might be an annual event, a product that has to be replenished or a capital improvement. More time should be spent on these items so that the amount can be more certain.  It is also important to determine the likelihood that your membership management organization will be able to stick to the budgeted amount for these items.

 

 

When members review the budget, they will have a better understanding of the organization and where their money is being spent. Therefore, it is important to post your annual budget on a website that uses membership management software. With our membership software, members will be able to log into the website, access documents and submit messages when they need help. This makes the budgeting and communication process easier for everybody.