Budgeting For Non-Profit Organization

Budgeting For Non-Profit Organization

How and why a realistic budget is relevant to non-profit organizations?

A realistic budget enables the non-profit organization prioritizes on both the short term and long term objectives which influence and impact the organization’s finances. Realistic budgeting will thus enable it to optimize its performance. Budgeting will also limit expenditure maintaining costs at low levels and increasing revenue margins. Limiting expenditure inhibits overspending and assures adequate decision making in the organization. A realistic budget also paves the way for transparency and accountability (Hardy, 2017). The donors are thus able to retain and increase their grants as they are assured finances are utilized responsibly. They can monitor the flow of funds and resources into and out of the organization.

Realistic budgeting also allows the organization to keep its focus on its overall mission and objective. A proper budget ensures the financial records are always updated and is utilized by their allocations. The organization will, therefore, be guaranteed of steady growth and increased revenue through an increment in donor margins and grants.

What are some of the potential consequences throughout the organization including employee decision making of an accurate budget?

Effectiveness in Management

Comparison of organizational accomplishments together with the budget enables management to evaluate whether they are on the correct path or have already deviated from meeting their goals. It acts as a correctional tool and a financial roadmap to the objectives and goals of the organization (Mensah, Lam & Werner, 2008).

Optimized Resource Allocation

An accurate budget also acts to ensure all the revenues and expenditures are monitored and controlled. The expenses are minimized, and all resources are used optimally (Bryce, 2017). Through budgeting, management can develop a culture of maximized optimization on resources and proper allocation among its employees.

Proper decision making

Timely accurate budgeting inhibits mistakes and equips the managers with the confidence necessary to proceed with their projects and plans. The budget allows the employees to proceed with the laid out plans and their innovations in accomplishing the overall organizational goals set out. The employees will thus be able to perform with limited and minute mistakes in their operations thus avoiding costs associated with the pitfalls (Hardy, 2017).

Select one tool to describe in more detail, including what online reviews list as its greatest features.

QuickBooks software application is a significant budgeting tool. It records and reports all amounts flowing into and out of the non-profit organization as all accounting data is centralized. It enables one create invoices, receives payments, pays suppliers, profile and remunerates employees, track sales and profits (Rathi & Given, 2016). The online software can be installed on any computer device which allows one’s information to be secure. The QuickBooks application also eases monitoring of cash flows throughout the organization. It keeps records of all capital movements through sales, invoices and scanned receipts.
Now in your own opinion, comment on how this tool would work for a non-profit organization. Would it meet the unique challenges of this type of organization? Why or why not?

QuickBooks will be able to receive and record deposits from donors, obtain and accept online donations, create customized non-profit statements and organize the donor records comprehensively. The application easily meets the challenges posed by the non-profit organization accounting criteria as it can be easily configured. The applications set ups, that is, the chart of accounts, customer utility and class utilities are set up to suit a non-profit organization. The best thing about QuickBooks is its ability to accept online receipts from donors and external grantors. They can monitor the capital movements throughout the organization and are thus assured of proper funds utilization. The applications features are user-friendly, and the applications are updatable to suit the requirements of any organization. Therefore QuickBooks can serve as a significant tool in the operation of a non-profit organization (Rathi & Given, 2016).


Bryce, H. J. (2017). Financial and strategic management for non-profit organizations. Walter de Gruyter GmbH & Co KG.

Hardy, J. Y. (2017). Strategies to Secure Sustainable Funding for Non-profit Organizations (Doctoral dissertation, Walden University).

Mensah, Y. M., Lam, K. C. K., & Werner, R. H. (2008).An approach to evaluating relative effectiveness in non-profit institutions. Journal of Public Budgeting, Accounting & Financial Management, 20(3), 324–3 54.

Rathi, D., & Given, L. M. (2016, November). Use of Technology in Non-Profit Organizations (NPOs) for Knowledge Management. In Proceedings of the Annual Conference of CAIS/Actes du congrès annuel de l’ACSI.


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