Get Your Painting Invoice Example for NPOs Easily and Efficiently

Painting invoice example for NPOs

[Music] okay thanks for your patience everyone for those of you who have joined us in the last minute or so I was just giving it a little bit of a cushion there to allow for some time for people to show up but let's go ahead and get started now just to kind of get this out of the way cancer a couple questions one yes this is being recorded and once it's done and put up on YouTube then we will email out that link for everyone so if you have to leave early or if you're not able to stay for the whole thing or connection drops or something like that or if you just want to watch it later because it's so good you can always have access to it and get to it another time these slides I'm not sure if we will have those available but I can double-check if so in that email that we email out with the link for the YouTube will include the slide deck as well if that is going to be shared so all right well let's go ahead and get started again my name is Alex and I'm gonna be hanging out with you here for a little bit here today and our topic for the day is tips on budgeting for your nonprofits let me get this up and going there so that's me I have been with Apple O's for this is my seventh year with the company and I've taken on a number of roles there but kind of my main task list usually involves just kind of helping train people so that includes our internal staff as well as our customer base on accounting on today's budgeting donor management really anything having to do with nonprofits and churches and their financials and specific specifically how it relates to fund accounting and Annapolis software and for those of you who don't know what we do we are an online accounting software in really a nonprofit software overall because we do fund accounting donor management efiling soon to do payroll as well as some other features coming soon as well so that's what we do so today we're going to talk about how nonprofits and churches create budgets and they do it for a variety of reasons and you know some of these reasons might include external and internal factors so for those of you who are new to a budget really what a budget is is just it's kind of a forecast it's a it's a plan so that as you look into the next year you know to 18 in this year that were in you're trying to plan for how much money you were gonna get how much money we're gonna spend what's our kind of end result and then kind of factoring that into a cash flow which we'll take a look at here a little bit later but again some of the reasons you might create a budget so the bank might require a budget prior to lending money so maybe you've been an organization for a while but now you want to take on some new things and so you're gonna either buy a building or taking on a new initiative and you need a loan for that so you're gonna go to the bank and ask for a loan and they're gonna ask hey can we get a set of financials or can we see your budget and how you're doing compared to your budget so that way they can gauge performance that's kind of an external reporting need for a budget again as you grow as a non-profit you might also have a board of directors that require a budget to ensure that you're spending money in alignment with your purpose so you guys have set out to accomplish a very specific goal let's set some boundaries let's make sure that you know what we're planning for income you know we're gonna get a million dollars this year well prove it you know why did you make that decision let's make sure that we're on pace with the money you expect to collect and then for that money that we're collecting let's kind of make a plan for how we're gonna spend the money as well because nothing is more frustrating or scary for a board to come to a meeting every month and see a red number and that net income and wonder why so budgets kind of help you stay locked into what your plan was for the year and it's kind of an internal reporting purpose and then there's something that kind of crosses both lines so you may also want a budget to just make sure that you have the resources needed to accomplish your purpose so people externally interested like donors or you know funders granting agencies something like that they want to know that you're going about your purpose the right way they want to make sure that you're being financially responsible your internal donors and and people kind of your constituents might want to know that information as well so those are some reasons to have a budget so today we're gonna walk through what a budget is we're going to walk through how to begin developing a budget for your organization show some tips and tricks for creating a meaningful budget discuss how to update a budget as circumstances change during the year which we call a rolling forecast and then cover how to report on variances to a budget so kind of from its Genesis all the way through to how you're then gonna report it during the next year we're gonna cover all of that today and I will disclaim that a lot of this is going to be in Excel today as well so if you're familiar with your Excel you're gonna see some things that you're probably familiar with if you know that Excel is a program but you've never really touched it today is gonna be a fun day for you so just keep with us so nonprofits focus on accountability rather than profitability so right off the gate you know the development of a budget is not necessarily to see how profitable you can be during the next year the main goal is just to make sure that the money I have or we have as an organization is being stewarded properly we're kind of checking the boxes as to you know if we need to report a certain way for a grant or we need to we're trusted with certain money there from donors or grants or agencies we want to make sure that we're being financially responsible with that money so the whole purpose is kind of more geared towards accountability rather than profitability and this includes fund accounting so fund accounting is kind of it's a brand of accounting that's unique to churches nonprofits and government agencies where again accountability kind of plays into where you have money but you want to make sure that money is kind of set aside and stewarded for the right purpose so that's what fund accounting does is kind of separates those things you can track them independently and with this budgeting practices within an organization mainly focus on the stewardship of those resources rather than profit margins so think of having a specific purpose for every dollar that you receive the more details you can build into your budget the more helpful your budget will be so anything that flows through or flows out of the organization you want to have a plan for because anything that's unplanned can scale very quickly and cause a lot of questions both from external and internal people so here are some common terms in budgeting the first of which is an annual budget so this typically refers to a 12-month period of the coming that means that work should be coming not coming the fiscal year of an organization so we're looking at 2018 pretty soon here in January most organizations have a fiscal year that is in line with a calendar year date range so January through December if you're an organization that has a different fiscal year then your budgeting process is most likely looking at rather than the calendar year but the annual budget for the most part kind of covers that 12 month gap and it's a kind of a set it and forget it thank to where you develop it and you put it in place and then you look at it you know on a monthly basis but it doesn't change during the year you don't really need to like make any adjustments or anything it's kind of there and you try to say to it as close to it as you can so it's an annual budget a rolling forecast is a monthly budget that's updated at a reoccurring periodic interval so at a poloz we have a rolling forecast for most of all of our operations and we review that at the close of every month so part of our process is to update the last month with actuals compare the actuals with the budgeted numbers and then update the future forecasted numbers with more accurate estimates so all that really means is we try to adapt with the seasonality and what happens during the year so we set a budget we most certainly set a budget but you know as things happen if you know let's say if we were planning on one of our departments only spending so much in personnel and you know office supplies and that kind of thing but then we land you know a big contract or something like that to where it kind of floods and a lot of customers we then have to kind of scale our operations in order to meet that incoming business and that is something that a rolling forecast would allow for so you still start with the budget but you just kind of know that well we're just going to kind of allow it to be a little bit more flexible so that way as the Year occurs we can be responsible with that update the numbers ingly and then kind of re forecast the remainder of the year zero based budgeting is a methodology where you start with basically no spending and have to justify every dollar spent in order to include it in the budget so it has to justify every single dollar that's spent with the organization it's a lot more helpful with specific categories of expenses than using it for the entire budget so for instance like with us external marketing is an area where zero based budgeting makes a lot of sense again you have to justify every dollar and kind of evaluate against other options in order for it to even be introduced into the budget so not even looking at historical trends or anything like that but just kind of do we want to spend this money what will it gain for us so let's put it into the budget zero based budgeting and then after all of that once you have a budget you can do variance analysis or budget to actual so this is saying whether it's a rolling forecast or an annual budget static budget no matter what kind of budget it is we've planned for certain values as far as our cash flow and income and expenses go are we meeting that so typically on a monthly basis you look at it and say here's our actuals here's what actually came in and actually was spent and how does that then compared to my budget which we set you know in the previous year or even last month if you're doing kind of the rolling forecast so then you compare it you make decisions you come up with reasons maybe it's justifiable maybe it's seasonality maybe it's something that you didn't foresee at all but either way you're looking at that typically again on a monthly basis in order to see do we need to make a shift are we okay do we need to plan ingly that kind of thing so especially kind of note for the purposes of today we're gonna focus mainly on creating a monthly budget and so kind of forecasted out for 2018 and how that then impacts your cash flow in your balance sheet because you start with a certain amount of cash at the beginning of the year and then if you forecast your income and expenses you've got a forecasted or budgeted net income that you're hoping to achieve for the year that will then kind of get added to or take away from that beginning cash balance so budgeting very much kind of is interrelated with the amount of cash that you have on-hand funds for the most part will be ignored today just for the sake of time but if you have multiple funds that you need to budget for think of each fund budget as a miniature version of the same process so again as an organization maybe you're a church and if you have an organization-wide budget you're saying here's all the income and all the expenses we're gonna spend for the entire church if you have multiple funds in the church let's say you have a general fund the mission's funds and a building fund your budget could be significantly different depending on kind of what fund you're paying attention to so in that case what you would do is you'd create a budget for the general fund a budget for the mission's fund of the budget for the building fund all three equal the master budget but each three are kind of their own independent forecast or goal for that specific fund or purpose or project or whatever you're handling there so what is important to have when preparing the budget the first one is detail so be a hoarder of information when you're going through this process not necessarily in life because that's going to involve a lot of boxes and be messy but for the purpose of creating a budget detail is significantly important the most important aspect of a budget is the detail supporting the budget so typically budgets are reported as a you know here's all of my income and expense accounts and their numbers but then you also typically have kind of notes or reasons why you've budgeted certain ways the more detail you can add into the creation of a budget the more you will understand where you spend the money for your church or nonprofit and how that spending accomplishes your mission so when you dive into creating a budget at a very granular level it forces you to ask meaningful questions on your spending and makes you justify the purpose of the spending detail also tells you where you are wrong in your estimates when preparing a variance analysis so it kind of just gives oh it sheds a whole lot of light on what the number is how we got there why we think this is an appropriate number and then you know with the supporting details if we're not achieving that number what are some reasons why so detail just data information having all that present is gonna be helpful the second is collaboration so involve who's involved so as an accountant you probably have a really good understanding of the numbers and and know how things flow through but you might not necessarily know you know why a certain department is spending the way that they do and maybe they're justified in their actions but you want to involve them to see hey what is an appropriate kind of goal for us to set for your department for the year this depends on the size so if you've got kind of a small operation you know that the people involved might be one or two people as you have a larger organization maybe with multiple funds and departments and funding agencies and all kinds of stuff you might want to bring more people into the process to kind of help kind of shed some light and maybe add again some detail so that way you can make the best budget for the entire scale of the organization and then aside from just kind of the more qualitative things like collaboration and detail there's quantitative things that's going to help as well so financial data so you're gonna want to pull all of the relevant reports that you're going to need in forming a budget that typically includes and again this might even kind of just relate to what we're doing here today but the financial data you're gonna want to pull is a balance sheet for the most recently reconciled month so for today we've done some prep in the Excel spreadsheet and we kind of figured out that the the last you know in my kind of example organization we're gonna be running through today the last reconciled month is October since November is still open so we're gonna run through October so I'm gonna pull a balance sheet for October 31st and use that as my kind of ending cash amount for my projections going forward you're also going to want to pull an income statement by month for the current fiscal year so again kind of assuming we're talking about January through December I'm gonna pull an income statement by month which shows me all of my income all of my expense and my net kind of income or loss for each month for January through October 2017 most people will have that unless you've come into existence as an organization this year and if possible try to pull that income statement by month for at least one prior fiscal year if possible if you've got more than that then pull that if not and the purpose of that is you're gonna be looking back through trends and making decisions based on seasonality that kind of thing so if you can have prior years data available it's gonna be really helpful if not it's just going to be a little bit harder to kind of land the plane with some things which we'll talk about a little bit but if you can go a pull in income statement by month for the prior fiscal year as well you can do more than that to is typically fine you know if you're pulling 15 years worth of income statements by month it's probably too much information but then again it might just depend and the balance sheet for their most reconciled month that's in there as well so you're also going to want to pull number for a balance sheet as of the end of the each previous fiscal year being compared so if I went and pulled 2016's income statements by month then I would also want the balance sheet for the beginning and ending of this 2016 as well just to kind of give a full set of where did we start what happened in 16 where did we end and then what's happened in 17 and where are we right now number five so any updated income and expense categories you want to use in the coming fiscal year your chart of accounts as an organization will change the income and expense categories that you have this year might not be the ones you want to use next year and you might have some lingering from years ago that you don't use today so that is okay all of those income and expense categories will change as your organization evolves and adapts and grows and and or maybe shrinks so if you already know that in the next year we want to kind of maybe reorganize some things or introduce a category that we don't have now or vice versa take one out bring those changes along with this budgeting process as well it's also possible that you get to those decisions based on what you end up doing while you're doing the budgeting process so just keep that in mind and then the last one is any other considerations to factor into the budget so do you have any grant guidelines do you have any you know ways of spending money that you need to keep track specifically of to stay within the guidelines of grant do you have any projects or designations that the board wants you to keep track of do you have any cash flow needs you know do you need to have a certain amount of money on hand at any given time as a as a buffer for like a bank account or something that's going to be important to know and then any obligation so any debt do you own any buddy money are you planning on owning anybody money do you have any sort of you know things that are coming to collection this year and that kind of stuff just try to again collect as much data financial data as you can before starting that process so in all of this Excel is going to be your best friend again there are from the spectrum of knowing that Excel is a program on my computer I'm pretty sure to being an absolute like wizard that you just kind of dump into the matrix like neo and then you can kind of see numbers just floating around you I'm probably like a three in that scale so this this kind of stuff is going to be helpful I will know how to do a decent amount in Excel and really what we're going to be covering today is is maybe mmm easy to moderate types of functions so I won't try to go crazy but try to be at kind of a level that is familiar for people that are familiar but also easy to understand for those of you who maybe don't feel comfortable in Excel but Excel is an extremely powerful tool what it does is it basically creates your data into a grid format to where then you can filter you can search you can sum you can average you can do all kinds of of kind of data manipulation in order to get to very specific numbers and variances and that kind of thing it really is just kind of it's a huge just sandbox you can do all kinds of stuff in Excel so if you're not comfortable in Excel now it's kind of a great time to start even if it's basic even if it's you know this minus this equals this you know even putting in basic calculations into Excel it's gonna begin to make you feel a lot more comfortable there so maybe next year you can you know go crazy with it but yeah so I'll do my best to explain things as we go we've kind of already done a lot of the pre work so that we're not doing everything here today in the hour that we have but it's also possible that you're gonna look at what I've done and go oh that's cute way way to go on your program but don't rub it in I'm sensitive about it so so let's take a look at excel so I'm gonna minimize this and just make sure that we're not okay no current questions great okie dokie so let's minimize that and get the Excel open okay so back to our list of things to grab and maybe real quick we do have a couple of polls that we want to do so let's take a quick little break and do a couple of these polls I'm gonna launch one you should see it pop up on your screen and if you can just give me a quick answer we'll give it about 30 seconds for each one we'll go through a couple of yous real quick so let me launch the first one here so the first one is have you ever created a budget for your organization select one of the following yes yes but I'm not sure I did it correctly or no this is new to me so feel free to answer that all right just give them another a couple seconds here 4 3 2 1 all right close all right not sure if you can see the results but 90% of you voted so 10 percent of you wake up hey we're still here 60% of those who answered said yes so most people are here familiar with the budgeting process in some form or fashion 14 percent said yes but I'm not sure I did it correctly so that's great and then to know this is all new to me so great let's do one more question is do you feel comfortable creating or adjusting the budget for your organization one of the following yes I have lots of experience yes I just know the basics not sure no but I can manage or no it would be a train wreck oh you know I was looking at these stats I was waiting for the percentage to pop up on though would be a train wreck and it finally did so thank you whoever that was from being honest and give that another 5 seconds or so alrighty okay so do you feel comfortable 32% said yes I have a lot of experience great welcome 47 yes but I just know the basics hopefully today is helpful for you then 8% not sure 12% no but I think I can manage the basics and then 1% no it would be a train wreck so it doesn't tell me any name so I'm not going to single you out whoever you were but thank you for your honesty I I know I know that goes so all right so let's get into the Excel portion so everybody can see the Excel it looks like it says it's too small to read so I'm going to maximize that real quick here so let me get this blown up a little bit okay so like we were talking about in the in the slide deck there you're gonna want to pull information so what I've done previous to us meeting here today is I've pulled some basic data for an organization that I am the treasurer of actually here in Fresno California called Central Valley Justice Coalition we are an organization that provides information and training and awareness about human trafficking and other kind of social justice issues in the Central Valley we've been officially in existence as a 501c3 for two years and actually this has been helpful because we actually do need to create our budget for 2018 so this has kind of been a very convenient process for me so what I've done is I've gone to appleís and I've pulled a couple of reports one of which being a balance sheet as of the most recently reconciled date annapolis that we have available so that is December 31st so this is our December excuse me October 31st balance sheet here's how much we had in cash and then these variances are known and then here's kind of our fund breakdown so kind of peel back the curtain a little bit there I've also pulled an income statement by month for the past couple of years so here is our income statement by month hopefully that's getting big enough for you here is 2016 so here is January all the way through December all of our income categories all of our amounts there and then all of our expense categories and our expense amounts they're leading all the way down to our net income for each month as it was in 2016 with our net kind of annual down here at the bottom right I've also done the same report for 2017 but this one's only through October since that's the most recently reconciled month so again let me make that a little bit larger there so I've gotten all of this data so whatever accounting system that you use appleís makes it pretty easy to pull a report and export it into Excel and that's what I've done here so what I would recommend is pull all of that financial data and make a separate sheet in Excel for each one of the separate reports so you can see here I've got my balance sheet as of 10:31 my income statement by month 4:16 same one for 17 and then if you have multiple years worth of data you can put them in different sheets down here at the bottom and what I would recommend is keep these untouched so leave them as they were don't mess with any of their numbers don't do any formatting do these leave these as reference points so that way if you have you like I've done a number of times gotten halfway through something and thought oh I probably should have done that differently about 15 steps ago you can kind of reboot and pull the information back in or if you just wanted to go back and see how it was originally presented you can go back and get those numbers as well so leave these relatively untouched and then what I did for just formatting sake is I put kind of a stopgap here sheet just a blank sheet with a different color which if you right-click on the sheet you can change the color of it just as a kind of a barrier between what I'm currently working on and then what is kind of an original file if you will all right so I've got two spreadsheets here working the first one is a 2018 working budget so this is what I've begun to kind of work through for out 2018 numbers and then I've got a 2018 working cash flow and this is the one where there's not been anything necessarily done too much here but this is eventually going to tell me once I've developed my budget and gotten to what my projected net income is per month I can then factor that into my cash flow and my starting date you know being the end of October I can kind of play that out across each of the months that I'm playing with here to then hopefully as of the end of December show me what our projected cash flow should be for at the end of 2018 okay so before we get too much into the nitty gritty the the whole kind of point of this process here is to develop good projections for each income and expense category that you have so if you're already using an accounting system or even if it's basic even if you're just keeping track of stuff in Excel or paper you still have a pretty rough idea of what you're spending your money on and how you're receiving your money how you receive your money is your income accounts so these are going to be these categories here each kind of category representing a different way that I'm going to be receiving money so we get donations from people we've kind of got that split out by all donations versus monthly donations we don't really use that a ton but it's their one-time gifts matching grants coffee sales miscellaneous sales reimbursements and then we've got some new account gouri's that we we've introduced in 17 as well but again kind of the idea is you're you're trying to develop a plan right for how you're gonna receive and spend your money so break these into applicable categories ones that make sense for your organization I wouldn't necessarily find recommend finding a chart of accounts online and just kind of copying and pasting it maybe as a guideline as to what kinds of categories to create but your chart of accounts your income and expense categories are going to be very specific to what you do as an organization and what your board or or you know reporting agencies want to see so figure out what categories work for you put them in here and again you're the point of this is to develop good projections for each one of these categories so that kind of starts with desired income and expenses so again your chart of accounts that then goes into fixed versus variable costs the difference between those is a fixed cost is something that doesn't change you kind of set it and it just kind of reoccurs meaning like rent there's something if you rent a spot for your office then you might have a rent that's you know $500 a month and unless you unless it something happens it's gonna stay the same that's a fixed cost a variable cost is something that scales with activity so that's where like if you know it for instance if we're if we're gonna spend money on buying swag you know stuff we all get coffee mugs t-shirts you know pamphlets that kind of thing that is typically going to scale depending on how much we end up doing throughout the year event wise so the more kind of events and projects that we do the more stuff we're going to want to have on hand to give out so that's an example of variable cost variable cost can even be salaries you know depending on how much you you pay people if they're hourly employees you can have variable costs with compensation you can have variable costs with utilities and that kind of thing so again think of fixed as stuff that is just kind of stagnant or at least very very steady variable kind of shifts with activity the point also is to create trends and ratios and project projections things that you're going to want to factor in basically you're looking at all this data in order to kind of forecast what your next year needs to be so by looking at what your fixed costs and variable costs are what are kind of healthy ratios to establish so maybe we're trying to aim for only you know 40 percent of our spending budget to be salaries you know that kind of thing that's important to know you also want to kind of look ahead and see do you plan to open up a new funding source are you planning on you know getting a grant this year that you didn't last year or something like that are you planning on hiring anybody anything like that all of those kinds of things you're kind of trying to factor into these numbers as you get going so pointing the whole process develop good projections for income and expense and another point of this whole kind of thing is to blend it then into cash flow so once you've gotten to what are some good numbers how does that then factor into my cash flow how does that kind of forecast what we're going to end the year with now something else that we're gonna take a look at here a little bit today is things that are non income and non expense and how they factor into cash flow so income and expenses it will cover most of your bases but in accounting there are some things that you spend your cash on that do not hit one of these categories namely debt payments mortgage payments any outstanding payables or receivables that you have at your end if you sell a fixed asset or inventory something that you that you have already kind of on your balance sheet as a possession or if you buy equipment those kinds of things typically don't hit an expense account or an income account so there's kind of another factor here where you're projecting how much you're going to receive based on income and new money coming in here's how much you plan to spend on money going out towards your different kind of expense categories here and then if you have any of those kind of non-cash excuse me not non-cash kind of some of those non income or expense type things you also want to start to factor those in so I'm going to add those just as notes down here so I'm going to put in debt payments outstanding AP and our mortgage market mortgage sale of equipment there's no spellcheck in Excel so have fun with that inventory and then I'll do equipment purchases just put those in there as well okay so these are again are kind of non income non expense things that will impact my cash flow so we're going to need to factor that in so again kind of the point of this then is to develop good projections for income and expenses blend that into a cash flow and then adjust as needed so this whole budgeting process if you're expecting to sit down and and stab you know take away two hours out of your day and get it done you might be able to but chances are this is gonna be a process this is gonna be something that especially if you need to involve multiple people you might start today but it's gonna be something that takes you into hopefully by the end of the year you have it done but maybe up until January to have a good plan as to now how the next year is going to work so take the time if you can Excel again is a very kind of fun place to work in and once you understand what you're doing so feel free to tweak the numbers you know you might plan for one thing and go that doesn't necessarily seem right so maybe what some other ways I can look at the data here and maybe change the projection in order to get it to be different so feel free to take some time play with it you might also change your chart of accounts depending on what you find so just feel free to kind of sink into it and really make this a process so that you understand it better rather than just trying to plug in numbers that results in an internet income okay okay so where do we start so in Excel you're gonna want to copy all that stuff into different sheets like we have down here so these are all my kind of current relevant reports I'm gonna want to create that buffer to separate what is an original file versus a working file you're gonna want to create the sheet and that is a copy and paste of the oldest income statement by month that you're working with so that's what I've done here so what I did is I basically took this income statement by month and I copied it into a new sheet and that's what's given me my categories here for January through December of 2016 so as of 60 these were all my numbers and I've copied them all here I verified that the amounts were all working down here which kind of has a quick little Excel tutorial here if you enter equals and say sum and then find some and tab or press Enter however your Excel works and then start to highlight cells above it it will sum all the numbers that you just put in so there's that so I verified that that sum was matching my income statement by month for the same kind of period of time January and all of my income so these all matched so I know that this file now works for my 2016 year what I then did is I added the other income statements by month to the same report so from here to here is January 16 from here to here is my year-to-date 2017 so that is those numbers there so I kind of merged everything together now these are gonna change a little bit so as you notice that there are some categories that I used in 17 but not in 16 so I had to factor those in I had to kind of increase the list here so that way in one sheet I'm looking at all potential income and all potential expenses that are kind of factored in and then where their numbers kind of drop off so these categories were used in 16 and then in 17 we added some more expense categories here which have continued through to October so if you have some of those kind of new income or expense categories that you want to factor into 18 it would be good to add them into the list here which if you select the row you click the little row here and then up here it says insert it'll insert a blank line up above there you could also do the same thing with delete if you're a keyboard warrior and you're on a Mac I don't know how to do it on Windows but you can do a keystroke to be shift command + and that will plus and minus some things in there like that so that's where you can add some of those new categories so those new categories won't have anything for 16 or 17 but as you start to factor in 18 they'll be down here at the bottom and then I've also inserted some other kind of summing here at the at the end so what I did was I entered in kind of some date ranges so where you know the months are up here at the top and then I've added in some months beginning and ending up here so the years excuse me beginning and ending so this formula then is kind of a sum of if all this criteria is present here and it's in between these dates than some of the numbers and again this is probably some of that stuff that you know if we had more time we would jump more on but these kinds of formulas will then begin to allow you to sum things and say here's my 16 data here's my 17 data and here's my now projected 18 data and then you can start to run variances on okay what is this year over this year and what's my 17 over 18 kind of what's my goal here what's the percentage variance so again you're looking for trends you're looking for basically healthy kind of numbers that not just hey we did 20,000 this year let's shoot for 25 next because well maybe 25 is a huge goal you know how have we done what's our activity been like do we have a lot of new donors factored in what are some kind of healthy goals for us to cover so once you've kind of combined everything the formatting then kind of takes into play so here's where then those summing kind of totals come in so once you've combined the years you're gonna want to have the summing all kind of taking place here so I'm summing all of the income down here I'm up summing the bottoms for the expenses and then I've got a net income playing in here as well which is my total income up here - my total expenses so that's giving me my net number per month for all those periods covered I've also changed the font color to be red if it's negative green if it's positive just for a quick kind of Christmassy look to your budget and then what I've also done is I've made the color of the text for the two months left in this year to be orange telling me that it's an estimate those months haven't happened yet or if they have it's it's not it's partial data so the month hasn't closed just yet so I'm going to kind of factor these in and then that will give me a kind of an ending actuals to look at for 2017 and that will help me then kind of plan again for it isn't 18 so that's where it becomes a little bit limited to where these numbers here for November and December of 17 I got these based on 2016's activity just knowing that in December and November we typically scale up a little bit from where we were at the months prior and just kind of looking at an average then I came up with these numbers just as plugs based on the percentages so that's the kind of stuff work you have multiple years worth of stuff to look at then it's helpful because you can begin to look at trends you can look at seasonality I know that at you know in the last two months of the year we have a big kind of Giving Campaign we do a couple of you know events so the giving you know the average is not necessarily gonna be the case to where our average here through you know July was was you know 7400 but I know that it's gonna be a lot higher in these kind of final months so I then looked back to 2016 to tell me what can I expect in these months so that again gave me kind of estimates as to what to expect for income and expenses for the remainder of the year so these will help you play out 18 okay so first again step is get everything into one excel file to do some formatting so start to pull in numbers and put them side-by-side and start to compare start to play with summing and variances or excuse me percentages and and different you know relationships that you can plug in with just basic formulas and then really at this point you're kind of off to the races with playing so this that's at certain point now kind of again kind of consolidates everything into one spot so now you can mess with stuff so now I can look at things like you know let's see what's this number here so what I did is this income here my are giving I know trends up towards the end of the year so that's how I got bigger numbers for November and December based on 15% and 8% kind of in the prior year the other stuff here is more of an average so I want to look at okay well you know coffee sales and you know these workshops and things that we do are typically a little bit more common where they just kind of click along throughout the year so what's my average so I entered a formula to say equals the average of the stuff that I select here so I'm going to go back to January so just tell me what was the average so what was our for the year and then I plugged that in just as a placeholder for November and December so put those numbers in there so now I can begin to look at 18 so same kind of thing I could very easily look at what's my average for 2017 for this you know line item my average per month was 23 you know dollars and some cents so then if I wanted to just kind of play out that average throughout the remainder of the year it's two twenty three twenty three and just say on average we're gonna get that for a month then what that's going to do is plus start plugging in those numbers these formulas are calculating what those numbers are the sum again and it's also bringing me to a total 2018 budget line item over here on the very right so I can look at it and go you know what 278 might be a little high let's plan for maybe it's just two hundred and maybe you just kind of override that and put in about two thousand two hundred and then that updates all your numbers so that kind of thing this is this is where the plane comes into play to where you've got all the data present in one spot and so now you want to go through and start to calculate these things and see where it results alright so let me get rid of that and put my formula back in there so let's just say that I've got this all kind of figured out here let's do what's an average here for 2018 actually you know what let's just do a projected kind of net income down here so let's say net income wise I'm going to plan for an average of twenty five hundred dollars per month so I'm going to just plug those in there like that expand those so I can see the amounts and what this is doing I previously kind of went through and added these formulas but what this is doing is looking at my cash flow and thinking that with January factored in let's make that the same kind of purply color here it's running a formula to basically say we started this with this much as of the end of October with my projected ending of November that projected net income is going to be 8200 so what it's doing is it's taking that value and it's adding it to where where I'm saying I ended with with October so it's giving me a new kind of ending cash flow projection for November and then with December then all the way through 18 so that's where at the end of this day you know if you get through the budget you create all your numbers you've got projected net income and you know cash kind of coming in and out for each month for the entire year then you can plug something like this in to say okay well if this budget works and we're starting with this much cash and we do how we thought we were going to do in November and December then kind of all things considered we should be able to end the 2018 year with 77,000 $190 55 cents which then you could say what's that - where we started like that and say we plan to basically gain over the next you know 14 months almost 40 grand so that's the kind of stuff you can begin to play with in Excel and I really wish we had a lot more time to go through some more specific examples on the Excel stuff but hopefully this has been helpful to kind of just kind of paint a picture as to how this can begin to play out in Excel and the power of Excel and really Google is going to be your best friend with Excel as well there's a ton of resources out there so you can Google something like how do i how do i sum things together how do i average how do i input a date you know we've even got formulas running up here for just entering the next month the you know the ending date of the next month to the left of this thing you know that there's formulas that you can do for almost anything you want in Excel so play with it do what you can and push the boundaries a little bit Google things that you don't understand and hopefully that can get you to where you're starting to get some healthy numbers here for your 2018 budget okay all right so let's go back to our presentation here for a little bit before we end so here's the thing and real quick I'm going to launch one more poll here let's see go watch question is what is your current accounting software applo's quickbooks online or desktop Blackbaud excel or other all righty give that in another five seconds or so let me take a drink coffee no all righty what is your current accounting software 24% said applo's hey welcome you've probably heard my voice at another time 36% QuickBooks Online or desktop 1% Blackbaud sorry Blackbaud 11% Excel or 28% other great let's do the last one this is the last poll for the day what is your annual revenue budgeting needs to be vary based on organization size so this helps us kind of tailor our recommendation one of the following under a hundred thousand one hundred to five hundred thousand five hundred to a million 1 million to five and then over 5 million gonna close in a few seconds here okie dokie so what is your annual revenue 35 percent under a hundred thousand twenty six percent one hundred thousand to five hundred thousand nine percent five hundred thousand to a million twenty five percent 1 million to five million six percent over five million fantastic thank you okay let's go through the last couple bits of this so once you've created a budget and gone through all that process and you now have a 2018 budget you can then take that budget and go to your accounting software and put it in so that's step one there so put your new budget into your accounting software and I put a little note here to say make sure to account for a month variability and what I mean by that is when you when you create your budget you notice that I had everything kind of broke it out into column per month you won't always just take an amount and divide it by 12 and have that be an accurate number because maybe certain during some months you know you're gonna do more activity so like for instance like an insurance payment you might make that once a year and that might be in like March so if you take the full amount and then equally across all 12 months that's gonna then look like you're under budget 11 months out of the year and then way over budget 1 month out of the year so that's where most accounting software's can allow you to budget on a monthly basis so you can be kind of more honest to what's going to occur in each month appleís allows you to enter income and expenses for the budget you can even budget into further detail by fund or tag so again kind of you know based on if your organization has multiple funds or a tag can be used to track like a project or an event or something like that you can even even kind of detail into a more further granular budget that way and then reporting on a budget a good practice is to review the budget reports on a monthly basis along with your other financial statements so types of budget reports you've got a year to date so that's where what it will do is let's say you're in March and it's January through December so in March you run a year-to-date report and it's going to show you here is your actuals in q1 so here's everything January through March also here is your budget totals for that quarter as well so it's not you could add your annual budget to that report as well but typically it's going to show you what have you what's the total kind of budgeted amount for those categories in those three months so it's going to tell you not necessarily a month but a you know a year-to-date figure on how are you doing your actual is compared to with you your plan or your budget you can also do a current month versus last month so what's March compared with February how did we do what's current month for the versus last year so that's saying you know what is my February this year compared to my February last year or you can even do current month versus year-to-date to where it's what's my June compared with how I'm doing for the for the year so that's where we did kind of a mid-year look this year and did kind of a current month versus year-to-date thing where it was here's kind of our health and here here's where we're over and under budget for the year and then how we're doing this particular month you can also run comparative to last fiscal year period if possible or applicable as well so again kind of along the same lines you could in some programs you can say what's my q1 in 18 versus my q in 17 and kind of if you typically do kind of the same things per year you can kind of quickly get to did we stay in line did we perform as expected how do we do compared to last year that kind of stuff so what are you looking for when you report on a budget you're looking for are you meeting your income and expense goals you spend all kinds of time and collaborated with a bunch of people to come up with goals so are you meeting those goals are you also meeting your cash flow projections so if you factored in your net income and you're meeting your your kind of goal is your net income then do you have as much cash as you said you're going to if not why it could be that maybe there is a transaction that flowed through though that missed your income and expenses like you sold property or something like that that might or portion of it might miss your expense categories but increase your cash are you over or under on either of those what is your variances are they accurate are they reasonable you might look at a variance and go yep okay we we expected that this type of thing happened so that's why we didn't hit that goal or that's why we really exceeded that goal something like that and then do budget totals need to be adjusted to reflect anything so again kind of that rolling forecast is stuff happening throughout the year that you need to then kind of factor into your remaining budget for whatever period or year that you're budgeting for all right so today we've we've kind of skipped a rock over a lot of things we've walked through what a budget is work through how to begin developing that budget for your organization showed some tips and tricks for creating a meaningful meaningful budget specifically in Excel how to update a budget as circumstances change start the year of rolling forecast and then shown how to or kind of what you're looking for when you're reporting on variances to your budget so our kind of shameless plug is something that we do at the end of most webinars which is kind of a this is put on by a PLO's so I have no problem just marketing applo's throughout the entire thing but you know I mentioned it a few times but really kind of as it boils down is we focus on software that's geared towards nonprofits and churches so if you're a non-profit or a church and you're using another system which you know our poll told us you were if it doesn't do fund that might be something that you want to consider and we also do donations tracking so we kind of want to be that kind of one-stop shop for all of your software needs for churches and nonprofits so yeah we can help with that so let's maybe go through some questions and then we have about like five minutes and we kind of used a lot of our time here today again I'll kind of skip a rock through kind of the common questions yes this webinar was recorded we will send it to you once it's available online and the slide deck I'm not sure if we keep a copy of that or distribute a copy of that but if so that will go along with the email that we send with the youtube link as well so there's that okay so first question here I'm confused why are you using Excel rather than appleís to do your budgeting I don't know excel well and I'm hoping to skip that step by using your software it's a great question so accounting software is typically not where you want to develop a budget reason being is a saw my spreadsheet had all kinds of stuff factored into it if you're making simple decisions like let's just increase our income goal by 10% this year and keep our expenses the same that's that's a super easy way to do a budget and it's not necessarily wrong either just depending on the size of your organization so that's the case you can run a report nap lows with my total income increase it by 10% and then plug those numbers and what are my expenses for this year let's put in the same numbers and just shoot for that super easy way to do a budget but if you have to do comparative reporting if you want to look at ratios and averages and sums and this was last I mean Excel is just kind of that again kind of open sandbox place where you can go and just run all of those kind of calculations so typically accounting software are not built for that kind of budget development although they will hold the budget once you've come up with the numbers hopefully that helps let's see can you highlight one of the percentage cells in working budget sure and you know what I can even I think what we're going to try to do is make kind of a templated version of what I showed you here for the budget so that way if you want just kind of something to plug numbers into you can so I'll see if we can work on that but you know if that helps there how do you enter a budget into applo's if you're in a plus and then click on accounting and then accounts and then budget you can then put in what year you're budgeting for so you can type in 2018 and say start budget or enter budget and then that will bring you to the screen which lists all of your income and expense categories and then an open field for you to put in those numbers what version of excel am i using it's a great question I'm on a Mac so I am using the version what does this fifteen point three four parenthesis one seven oh five one five and parenthesis that it's I think it's the two thousand don't even know it's the newest version whatever that is 2016 I think that's here and we get back to my questions here we go okay let's see new users to Apple OS are these reports of accessible in standard package yes all reports are accessible in every package of Apple O's the only caveat is if you have a feature that is exclusive to one of the higher packages like budgeting by fund those fund budgets will only be available if you can budget by fund but income statement by month balance sheet income statement variance analysis all that kind of stuff is in every package of applo's what the difference between cash flow projection and income projection income or net income projection of factors in your income and expense accounts there might be things that bypass your income and expense accounts like sale of property or purchase of equipment or payment of debt those types of things will impact your cash flow but will not show up on an income statement so that's kind of the difference between those two can I tag budgets with the standard package yes well you there are tags in the standard package but there's not budgeting by tag in the standard package that is a more advanced feature which we can get you some more information on Angelique let's see if you have separate departments budgets for departments or product project managers how do you track that in applo's can you send them a report at the end of each month yes there are ways to set up budgets by fund and by tag and then if you have X access to that you also have kind of what we call a custom report manager to where if if I'm the head of a certain department and that departments a tag and you've budgeted for that tag you can allow me to have access only to that particular tags reports in applo's so good question there's a lot more information that comes along with that but Jan we might be able to get you some more data there does apples provide payroll services and we don't in-house but we are working on a partnership with gussto which should be released in the next month or two and I do want to be sensitive to everybody's time so it is 11 o'clock Pacific time our webinar has kind of expired so what we're gonna do here is I'm going to download the rest of these questions will write up answers to them and send you responses probably by the end of tomorrow so I appreciate you guys taking the time I know today was a lot of information hopefully it was helpful but if you have any follow-up questions feel free to email support at Apple O's comm or if you have any questions on maybe some of our more advanced features than email sales at Apple is calm you can also visit our website at post calm and run through any data that's on the website as well and we will be sure to get you that youtube link and maybe slide deck and maybe Excel spreadsheet as well hopefully by the end of tomorrow ok thank you again for taking the time my name is Alex it's been fun hanging out and let us know if you have any more questions talk to you soon you [Music]