Budget manual definition

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What is a Budget Manual?

A budget manual contains a set of instructions, showing department managers how to prepare their budgets for the upcoming year. Using a manual standardizes the information that is prepared for the accounting department, while also clarifying the timing for when budget information is supposed to be submitted for review.

Example of a Budget Manual

The exact contents of a budget manual will vary, depending on the complexity of the organization. Nonetheless, the general structure of a budget manual for most organizations would likely include the following items:

  1. Introduction
    1.1 Purpose of the Budget Manual
    1.2 Objectives of Budgeting
    1.3 Overview of the Budgeting Process

  2. Roles and Responsibilities
    2.1 Budget Committee
    2.2 Department Managers
    2.3 Finance and Accounting Team
    2.4 Senior Management

  3. Budget Preparation Guidelines
    3.1 Budget Assumptions (Inflation, Exchange Rates, Market Trends)
    3.2 Revenue Forecasting
    3.3 Expense Forecasting
    3.4 Capital Expenditure Planning
    3.5 Personnel and Staffing Budgets

  4. Budget Preparation Procedures
    4.1 Timeline and Deadlines
    4.2 Budget Forms and Templates
    4.3 Instructions for Completing Budget Forms
    4.4 Common Errors to Avoid

  5. Budget Review and Approval Process
    5.1 Departmental Budget Review
    5.2 Consolidation of Budgets
    5.3 Final Approval Procedures

  6. Budget Monitoring and Control
    6.1 Monthly and Quarterly Variance Reports
    6.2 Budget Adjustments and Revisions
    6.3 Reporting Requirements

  7. Appendices
    A. Sample Budget Forms
    B. Glossary of Budgeting Terms
    C. Contact Information for Budget Support

When to Use a Budget Manual

Budget manuals are most commonly used in larger organizations where there is a high degree of complexity, requiring more coordination in the preparation of a budget model. it is especially useful when there are many people involved in the budgeting process, since it shows each of them which tasks they are responsible for completing, as well as their deliverable due dates.

There is less need for a budget manual in a smaller organization, where operations are simple enough to not require a high degree of budgeting coordination.

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