It is probably a fairly dangerous prospect for one person to attempt to develop a budget for an organisation on their own. A much wiser strategy is to involve a team of people, each of whom is given the task to provide estimates of revenues (if any) and costs for a section or department of the organisation for which they have responsibility. It is likely that such individuals will be able to provide reasonably accurate forecasts of income and expenditure. However, they will also present a "wish list" which those in charge of the budgeting process will need to examine for financial feasibility.
Business plans tend to change from year to year and this can have a significant impact on the budget. Anyone who is involved in budgeting must acquaint themselves with the Business Plan. It is important to determine whether there are completely new strategies, expected changes in the level of business, changes in staffing level, special events, planned maintenance and other factors that will obviously impact on the budget.
Analyse three (3) internal and three (3) external factors that can impact on the budget. List them and provide a brief description on the positive / negative impact of each. Use the template provided below.
