The recent downturn in the economy has made it more important than ever to project revenue accurately when forming a budget. It can be difficult to forecast future resources given the instability, but regular examinations can make it much easier especially for organization with limited resources. To forecast the revenue as accurately as possible, understanding and documentation of sources is paramount. Also, these sources should be sorted by how variable they may be. The more variable a source, the less reliable it is for revenue projection. For example, donations may be more variable than a funded endowment already in place. It is important to document any changes in revenue.
It is good to know what factors might changes revenue at any given time. Are there certain behaviors from clients or of the organization itself that come into play? Consider how the economy might affect the individual organization's revenue. Another consideration should be the role that the government plays in the organization. Does the organization rely on government grants or could it possible lose funding or change in tax status? These are good questions to ask when preparing or planning a budget for this type of organization.
Economic information can assist in projections. Obtaining local economy information may be as easy as staying in touch with your local business community. Many college and university classes study and do projects that can directly assist you in accurate projections. Local bankers, small businesses, and real estate officers can provide insight in the local economy. Also, obtaining local sales tax collection rates and how they change can help gauge the status. Additionally, there are forecasting firms you can hire to assist an organization. Two techniques are qualitative (experience and judgment of individuals) and quantitative (statistical analysis). The combination of both techniques is desired when dealing with both stable and unstable revenue. The goal is accuracy in projection so that the budget is correct.
It is good to know what factors might changes revenue at any given time. Are there certain behaviors from clients or of the organization itself that come into play? Consider how the economy might affect the individual organization's revenue. Another consideration should be the role that the government plays in the organization. Does the organization rely on government grants or could it possible lose funding or change in tax status? These are good questions to ask when preparing or planning a budget for this type of organization.
Economic information can assist in projections. Obtaining local economy information may be as easy as staying in touch with your local business community. Many college and university classes study and do projects that can directly assist you in accurate projections. Local bankers, small businesses, and real estate officers can provide insight in the local economy. Also, obtaining local sales tax collection rates and how they change can help gauge the status. Additionally, there are forecasting firms you can hire to assist an organization. Two techniques are qualitative (experience and judgment of individuals) and quantitative (statistical analysis). The combination of both techniques is desired when dealing with both stable and unstable revenue. The goal is accuracy in projection so that the budget is correct.
