Building a Budget
Accounting 101: Part 3
A budget is nothing more than an estimate attached to each income and expense account you plan to use this year.
Setting estimates
Take the accounts from your P&L (see Part 2) and put a number next to each one — how much you expect to bring in or spend:
| Account | Budgeted |
|---|---|
| Membership Dues | $1,200.00 |
| Spirit Wear Sales | $500.00 |
| Event Expenses | $600.00 |
| Staff Appreciation | $400.00 |
That’s it — a budget is just estimates, one per category, for the accounts you already know from the P&L.
Watching actuals against it
As transactions come in, each one lands against its account, and your budget compares the estimate to what’s actually happened. Say you sell $15 memberships throughout the year until Membership Dues actual reaches $750:
| Account | Budgeted | Actual | Remaining |
|---|---|---|---|
| Membership Dues | $1,200.00 | $750.00 | $450.00 |
Every transaction that hits Membership Dues moves the Actual column — the budgeted number doesn’t change, but you can see at a glance how close you are.
One budget, one year
A budget covers a single fiscal year. When the year ends, that budget ends with it — next year starts with a fresh set of estimates. What “fiscal year” means for your PTA is worth knowing before you set one.
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