Organizational Structure of Budgets

Calculate how much you own as part of the organizational budget.

Budgets are collections of numbers and financial figures. The budget structure is meant to present financial information, whether for a business, organization, family or personal needs. There is no set rule in place about budget structures, but it is commonly presented in sections or headings. Organizing a budget in sections will make the budget easier to read, which means that you can easily find and pinpoint specific financial information and figures. An organized budget is also easier to update and maintain.

Financial Worth

A common budget will have two main sections, whether it is a personal or corporate budget. The first section will outline how much the business or person owns and owes, while the other section will show the monthly cash flow. The cash flow represents the money coming in and going out. The first section presents the financial net worth of the person or business in the form of assets and liabilities. Calculate how much is owned in assets by adding up the values of owned property or cash savings, along with how much is owed in liabilities by adding up unpaid banking loans and taxes, for example. Subtract the amount owed from the amount owned to find out the net worth.

Income Figure

The second section of a budget presents the cash flow, so the money coming in and going out, whether it is a personal or business budget. If it is a personal budget, the income is often from salary or job projects, while corporate budgets can include a collective income from sales, investments and shareholders. Add up the total income to find out how much money you have to work with when you are organizing and developing your budget. A rule of thumb is to not use all of your income simply because it is available.

Expense Figure

Make a list of everything you spend money on each month. The fixed expenses are those that do not change in amount every month, so rent, bills and insurance are often fixed payments. Variable expenses are those you can have one month, but not the next. Variable expenses can also be present each month, but change in amount. For example, groceries and clothing shopping are variable expenses. For a business, variable expenses include outsourcing fees, marketing campaigns and office supplies.

Savings

Add up the fixed and variable expenses to get the total spending for each month. Subtract this amount from your monthly income to see if the income covers the monthly spending. If not, you will need to adjust the expenses, so the income can cover to spending. If not, you risk going into debt. If the amount is positive, you can save the money.

References

• Business Directory: Operating Budget
• Solution Matrix: Budget/Budgeting