5.7.4. Budget Planning 

Budget planning is a meticulous and collaborative effort that involves multiple stages and participants. To ensure a thorough and effective budgeting process, a detailed timetable is established, covering planning, implementation, control, and evaluation phases. This schedule should provide ample time for each step to be carefully completed, allowing the budget to be reviewed and approved well before the start of the next fiscal period. Collaborative planning ensures that diverse viewpoints are considered, resulting in a fair allocation of funds aligned with the organization’s mission. 

The budget planning process consists of several distinct phases, each building on the information from the previous one: 

Evaluation Phase: This phase involves analyzing past performance and identifying factors that are likely to impact future activities. 

Preparation or Planning Phase: Information from the evaluation phase is used to forecast and draft the initial budget. 

Justification Phase: This phase involves reviewing, revising, and obtaining final approval of the budget. It typically includes input from key organizational administrators, such as the CFO, who have the authority to allocate funds. 

Implementation or Execution Phase: The approved budget is put into action, translating budgeted expenditures into operational functions. 

Control Phase: This ongoing phase involves monitoring to ensure that operations remain aligned with the budgeted predictions.