IT is normally called “budget” and is the main tool to be able to anticipate what will happen to our Box, usually in the next 12 months. The Boxes almost always do not set up a budget because the Box Owner either does not know this tool or believes that planning is useless or complicated by implementation and that control is a process that can easily be done without.
This document is the translation into numbers of the strategy that the Box Owner intends to follow and the objectives it sets itself and a sort of thermometer both of its validity, and of its implementation as foreseen.
The structure of a budget is normally composed of the economic budget which is presented as an income statement and shows the costs and revenues of the future financial year, income and gross economic results. Following are the Asset Budget which it represents is a preventive balance sheet referring to 31 December of the following year and the financial one in which the necessary investments to the Box are identified, if there are any.
Setting up a forecast budget is certainly not easy also because the variables involved are many and complex to calculate, but it remains the only useful tool to face the future by following a guide that is all the more useful. Only with the budget it is therefore possible to define the objectives and control the achievement of the same.
The Budget is a document that highlights the economic and financial results that the Box usually intends to achieve in the span of one year and together with a real-time economic-financial management allows to understand if you are on the right track to reach as planned or if corrections are needed.
The Budget allows for example to know in advance and with precision what are the costs of the Box month by month, what are the revenues foreseen on the basis of the various types of gift and how they are chosen by the members. The Budget allows to forecast the seasonality of the revenue as well as to set up the strategies to optimize the cash flows and, to put it in simple words, always have thing in control.