V.Other things that need to look at while preparing a budget
Once you have done the draft budget preparation,
please also look at the following: ·
- Check the formulas (if you are using a computer)·
- Check the number of units and the months etc.·
- Look at the previous years financial reports and see whether it went as planned or under/overspending in any heads. If so, keep them also in mind while preparing a new budget
- Add 5 to 10% the overall budget to take care of inflations and unseen expenses cost should always be estimated higher than the current rate and say put 10% higher to meet inflation etc.
- If you are sending proposal for continuation of an existing programme check if the activities proposed this year are more than last year, then you also need to look at the administrative costs involved.
V. What happens when you have done a proper project planning starting with need assessment stage,while preparing the budget you realised that the budget thus planned much more than the donor agency likely to support. In such situations what we immediately try to do is to reduce the budget without looking at whether it is going to affect the overall planned project.
So the best option for you to keep the budget as it is, and discuss with the donor agency who is willing to support this project and explain them with justifications,the reasons why this whole money is required. If the donor is convinced they may look at it once again and make a decision as to whether they will support the project in full. If not, the donor may suggest you to contact some other donors for partial funding to meet the balance amount. Or if you request, the donor may refer the same to some other donors who may consider providing the balance amount. Alternatively, you need to look for some other donors who you may think can fund the balance. But do not curtail the planned budget for the sake of meeting donors limitations.