Budget Preparation Checklist

Preparing a budget can be a long and arduous process, but it doesn’t have to be. By efficiently gathering all of the information you need and following clear steps to gain approval from top management without excessive delay, you can implement a new budget in no time.

A well-prepared budget is an effective management tool as it enables you to see if you are on track to meet goals or if corrections are needed mid-course.

Run this checklist on an annual basis, ideally 3 months before the end of the fiscal year, to prepare your departmental budget as efficiently as possible.

Contact for approval

Before you begin preparing the budget, set a target date for approval.

Before you begin planning the new budget, it’s essential that you have a good understanding of the department’s current financial status. 

Review the most recent budget to gain an understanding of where the department’s finances currently stand and identify significant variances that need to be addressed. 

As you review the most recent budget, analyze and evaluate any significant variances to understand if there are any adjustments that need to be made when planning the current budget. 

Note down any significant variances below along with a brief evaluation of their cause and potential impact on future budgets. 

List three to five goals for the upcoming year using the form fields below.

The goals should be:

Examples of clear goals: 

Increase gross sales by 5%

Reduce office supply expenses by 10%

Decrease admin costs as a percentage of revenue by 3 points

Reduce inventories by 2% bt the end of the fiscal year

Ensure that the goals are aligned with the organization’s strategic priorities. 

Prioritize the goals so you can assign responsibilities and monitor performance accordingly. 

Once you have defined a handful of goals that are aligned with the company’s strategic priorities, record the ways in which you and your colleagues will go about achieving them.

What needs to be done, and by whom, to give you the best chance of success when you review the budget this time next year?

List all of the expenses incurred by your department. These are broken down into fixed costs and variable costs. 

For example, for a simple office budget, the list of expenses may look as follows: 

Fixed costs:

• Payroll expenses
• Utilities (electricity, phone, internet, water, gas etc.)
• Rent

Variable costs:

• Office supplies (pens, pencils, legal pads, copy paper, stapler/staples, tape, printer ink, mailing supplies, filing supplies)
• Postage/freight
• Equipment maintenance and repair

Estimate the average monthly cost of all your variable expenses. 

Variable expenses: {{form.List_of_expenses_-_Variable_costs}}

Then add together your variable and fixed costs 

Fixed expenses: {{form.List_of_expenses_-_Fixed_costs}}

Now that you’ve estimated the monthly cost of all expenses, multiply that by 12 to get the estimated annual budget.

Average monthly cost: {{form.Average_monthly_cost}}

Once you’ve done the expenses side of the budget, list all of your department’s sources of income and/or funding that represents the money you have to spend during the upcoming year. 

Now project the total amount of income/funding your department will have for the upcoming year. 

Sources of income: {{form.Sources_of_income/funding:}}

Now it’s time to document all of the financial data you have gathered in a budget spreadsheet. 

If the spreadsheet is accessible online, enter the link below so you can refer to it with ease. 

Important data

Expenses:

List of expenses: 
{{form.List_of_expenses_-_Fixed_costs}}
{{form.List_of_expenses_-_Variable_costs}}

Average monthly cost: {{form.Average_monthly_cost}}

Total annual budget: {{form.Total_annual_budget}}

Income/Funding:

Sources of income: {{form.Sources_of_income/funding:}}

Total annual income: {{form.Projected_total_annual_income/funding}}

Finalize the budget by verifying that it: 

Submit the budget to senior management for approval. This is a critical step in the budgeting process that must be completed before it can be incorporated into the master budget and implemented across the organization. 

You can use the email template below to request approval. 

Ensure you have obtained approval from senior members of staff before moving on to the last couple of tasks in this checklist. 

Note down any important points of feedback in the form field below 

Once you’ve got approval from top management, you can incorporate the departmental budget you’ve created with the company’s master budget. 

Keep track of all changes you make to the master budget. Remember, you are dealing with sensitive data here, so take your time in order that you maintain data integrity. 

In order to reach the goals that you’ve set out to achieve, you need to assign specific responsibilities to other managers. 

This is the final step in the budget preparation process and the first step of implementing the budget you’ve put together. 

• Dan McCarthy – Budget Management Tips for New Managers
• Harvard Business Review – The Right Way to Prepare Your Budget
• Atul Gupta – Office Budget: Meaning, Importance and Limitations of Office Budget
• Cleverism – Budgeting Process: Complete Guide
• Jack Abdo – 4 Benefits of a Well-Prepared Budget
• Shemiah Williams – How to Create an Office Budget
• Patricia Lotich – 10 Steps to Developing and Managing a Budget
• Shea St. Laurent – 5 Steps to Presenting an Exceptional Departmental Budget
• Community ToolBox – Planning and Writing an Annual Budget

• Budget Template
• Records Disposal Checklist
• Office Safety Inspection Checklist
• Office Risk Assessment Checklist
• Office Conflict Resolution Checklist
• Employee Discipline Checklist
• Employment Termination Checklist
• Performance Review Checklist