How to Prepare a Budget Statement

A company annually prepares a budget statement to provide the details behind the organization's budget and initiatives. It is commonly presented to the board of directors and upper management. Managers base their budget statements is on information they gather from various departments, including marketing, accounting and groups that lead special projects.

Step 1

Write the name and title of the person who is compiling and releasing the budget statement along with the unit or department that he represents at the top of the page. On the next line write the date that the statement is being released.

Step 2

Write your budget statement just like a regular memo or letter. Greet the person or people who you are sending this to, such as "To the Members of the Board."

Step 3

State the total amount of the budget for the upcoming fiscal year in the first paragraph. For instance, the statement can say "We're happy to announce our 2010 budget of $11,240,000" or something similar.

Step 4

Summarize the organization's focus and objective for the coming year in the next paragraph. For example, if the company is a nonprofit you might want to describe the organization's mission and what it plans to accomplish in the upcoming year.

Step 5

Create individual sections that discuss each part of the budget for the upcoming year. For example, if a large portion of the budget will be going toward online advertising initiatives or more research, break these down into their own sections. Explain why money is going toward these initiatives and in what proportions.

Step 6

Talk about any new programs that have begun or significant progress that was made in the prior year. If you plan to fund these new programs with the budget money included in this statement, be sure to discuss this in a special section entitle "New Programs" or something similar.

Step 7

Conclude the budget summary with a look into the future. Ask important questions before writing your summary. What are the company's goals for the next five to 10 years? How does this budget tie into these plans?

Tip

A budget statement could be as short as a page long, or as long as a five or six pages long. Try to keep the budget statement as concise as possible, but be sure to include complete information about the money that will be spent.

You may also choose to provide a spreadsheet with the written statement that breaks down the budget numerically. List anticipated revenues for the upcoming year in one section, list each department or program that is receiving budgeted money in another, and finally total everything up so that you can see the net surplus or budget deficit.

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