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Budgeting, accounts and banking

Working out a budget

A budget is an estimate of income and expenditures for the next year, broken down into headings such as office expenses, cost of sales (if you sell food), staff costs, premises, transport, marketing. You need to do this having planned your activities for the year.

It is also helpful to work out a ‘cashflow’ of when money is coming in and when it is being paid out. This will help you to identify when you might run out of money and to plan accordingly.

Books and accounts

It is essential for an organisation to keep good financial records or ‘books’. These can be actual books written by hand (available from a stationers), a computer spreadsheet or book-keeping/accounting package. You also need to file cash receipts, invoices and other paperwork associated with a transaction. If you are handling cash, you need to work out procedures for this.

Your books will be used to create your end of financial year accounts and other financial reports throughout the year. Charities and limited companies are legally obliged to submit accounts to their regulators. Unless your accounts are simple, it is worthwhile employing an accountant to do them for you.


If you are handling money you will need a bank account. Some banks have services for the not-for-profit sector.