A budget is a document that lays out a plan for managing revenue and expenses. It includes assumptions to support expense and revenue targets for the year. Budgets can be one year or have multi-year projections. They are created through estimating revenues and costs, gathering public input (for governments), and approval by management or legislative bodies. Sample budgets shown include formats for government, business, and household with categories like revenues, expenses, capital budgets, and compensation. The summary emphasizes that budgets require active management to balance as planned.

1. Budget 101 – Basics on how to
Create Budgets for Government
or Business or Household
By: Paul Young, CPA, CGA

2. Agenda
• What is a budget
• How are budgets produced
• Samples of Government, Business and Household Budgets

3. What is a Budget?
• Budget is document that lays out the plan on how you will managed
your revenue and expenses
• Budget is also detail document including assumptions as part of
supporting both expenses and revenue targets for the year.
• Budgets typically are one year, but can have 2-3 year projections as
part of the overall strategic plan

4. How are budgets created
• Government
• Cabinet or council sets the priorities for the fiscal year
• Preliminary estimates are produced for the new budget
• Budget meetings are conducted with the public for input
• Fiscal update is released as part of managing the targets for current and next budget
cycle
• Budget is released
• Business
• Budgets start with forecast for the last few months of a fiscal year
• Sales are projected through run-rates/discussion with sales management
• Cost are projected through run-rates and/or expense targets set by management
• Household
• Based on Cash Flow and everyday expenses

5. Type of Budgeting
• Zero Based Budget
• Starting from scratch which means building up revenue and expenses from
scratch
• Budgets based on run-rates with individuals adjusted the run-rates
based on their targets

6. Government Budget - Sample

7. Government Budget - Sample

8. Government Budget - Sample

9. Business Budgeting
• Revenue Budget
• Capital Budget
• Compensation Budget
• Operation Expense Budget

10. Business Budget

11. Business Budget

12. Household Budget

13. Household Spending

14. Summary
• Budgets do not balance themselves
• Budgets include assumptions
• Budgets for government become law when approved by house of
commons, provincial legislation, council
• Business Budgets are approved by either Senior Management or the
Board of Directors