It is important to design your budget recognizing the fact that some revenues and expenses fluctuate throughout the year. Most churches develop a twelve-month budget but differ on how the budget is displayed and managed.
To have the most realistic and manageable view of the budget, create a Church Cash Flow Budget. Unlike the creation of a budget that evenly divides income and expense categories by the number of months in the budget period (linear), a Church Cash Flow Budget provides realistic month-to-month projections of anticipated receipts and expenditures. The advantages to creating this type of budget are numerous, including:
- Gaining visibility into actual revenues and disbursements of cash
- Understanding how seasonality may affect revenues or expenses
- Managing cash flow for months with higher expenses or lower income.
- Mitigating the risk of not having enough cash on hand to pay bills.
