Budget

Why Make a Church Budget? And How?

It is highly recommended by the "Local Church Accounting Manual" that your church set up a Budget for each year. A budget is simply a plan for how money will be spent. So a budget will help guide your financial decisions as a church and will help you to be more aware of how you are spending your money and whether changes need to be made. Here's how to make a budget:

1. Start planning your upcoming year's budget in November of the current year. Go to Reports & Graphs -> Income/Expense Report in Jewel, selecting "This fiscal year to date" as the dates for the report. Then print the report or if you prefer, copy the report to clipboard and paste it into a spreadsheet program. Divide the amounts on the report by 10 to get average monthly amounts, then multiply the monthly amounts by 12 to get yearly amounts. An alternative method is to select the report dates for November of the previous year to October of the current year. Use this report to guide your budget for the following year.
2. Discuss prospective needs for the upcoming year with the church board, and include these possibilities when drafting the proposed budget.
3. If your Church Budget includes both church expense as well as organizations of the church, be sure to include the organizations in the budget.
4. Determine which amounts will be fixed and which will be percentages. For example, the church insurance will be a fixed dollar amount. Other accounts like departments could use a percentage.
5. Make a tentative Budget to present to the church board for consideration, modification, and approval.

Budget Allocations in Jewel

Jewel allows budgeting in two ways - by dollar amounts, and by percentages. The recommended method is to use dollar amounts, because it is simpler and more accurate. If you choose to mix percentages and dollar amounts, then the accounts for which you enter a percentage will receive funding from what is left after all the dollar amounts have been allocated. For example, if Church Budget received $1500 during the month, and the Monthly Allocation Total Cash Amount is $900, the difference of $600 will be divided between the Percentage accounts.

In general, use dollar amounts for monies that you must spend, like the mortgage and utilities. Other items you may choose to fund as percentages, so that they only receive funds if there is sufficient income, like Flowers or Prayer Ministry.

Jewel will use the budget values you enter to create the "Monthly Budget" and "Annual Comparison" reports, which can be used to monitor how your spending compares to your budget throughout the year.

Budget Allocation Set-up

1. Go to Maintenance → Edit Budget Allocations.
2. Select the year for which you are making your budget. You can either edit your current year's budget (which will affect only this and future months, not past months), or enter the new budget for the next fiscal year.
3. Enter the Total Annual Budget. This is an estimate of the total amount you expect to spend from the accounts included in the budget. The better your estimate, the better the information you'll get from your budget reports.
4. Under "From Account" select the account that is serving as the source for budgeted funds. This will usually be Church Budget, depending on how your church's accounts are set up.
5. Under "To Account(s)", select the accounts you're budgeting to, and fill in the monthly amounts budgeted to each. Enter dollar amounts by simply typing in the amounts. To enter percentages, type the percent number followed by the percent sign (%).
6. As you enter the values, watch the "Monthly Allocation Totals" in the middle of the screen. They will change according to the values you enter. When you have finished, the dollar amount should equal about 1/12 of the Total Annual Budget and the percentage should equal either 0% or 100%.
7. Click OK to complete your budget and let Jewel store the values you have entered. After presenting your budget to the board, any changes can be made by going back to Maintenance → Edit Budget Allocations, making the appropriate changes, and clicking OK.

Budget Tutorials

Percentages vs Whole Numbers in allocations

---

Return to Chapter 4: Bank Reconciliation

Continue to Chapter 6: Less-common Transaction Types