How to Calculate Expected Expenses and Income in an Advice Centre
Before you can work out what your organisation’s expenses will be, and how much money you will need, you must be clear about the organisation’s objectives, and how you plan to achieve them in the period for which you are preparing a budget.
Analyse What the Organisation Spends Money on
Once you are clear about what work the organisation will do for the time the budget covers, you must write down everything that costs the organisation money. Start off with a list of everything you can think of. Afterwards you can put the items into groups or categories.
So your final list could look like this:
Staff:
salaries
medical aid
pension fund
UIF
Accommodation:
rent
electricity, water
telephone and ADSL lines
Internet service provider
Administration:
stationery
telephone, fax
postage
bank charges
groceries
Training Department:
transport
food
cost of venues
accommodation for participants
Equipment:
rent/purchase
repair and maintenance
Publications:
printing costs
distribution costs
When you have worked out what you plan to spend money on, you can work out how much each item and each category costs. You can use your own records to work out the costs.
Example:
If stationery has cost your Advice Centre R500 per month in the past year in the Ezikweni Advice Centre and inflation is at 10%, what should you budget for in the following year?
R500 + 10% inflation = R550 per month R550 x 12 months = R6 600 per annum
But the records show that the number of clients who came to the Advice centre over the past six months increased by 10% every month. This means there will be an increase in spending of approximately 10% on stationery.
The calculation will then look like this: R500 + 10% inflation = R550 per month
R550 + 10% increase in spending due to increase in numbers of clients = R550 + R55
= R605 per month
R605 x 12 months = R7 260 per annum
