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Does the budget need to balance?

10 years 5 months ago #163601 by FoxMom
We are the same as Erica---
We have a line in our budget that shows 5,000.00
that way our budget balances down to zero and we have the 5,000.00 that is allocated for each year as start-up. Our by-laws state there must be 5,000.00 carryover for start-up each year.

I think you do not stick to your budget, you could get into big trouble and not have funds left at the year---

We've had years where we made more than the budget, so there was carryover, but then the next year, we didn't raise enough to match the budgeted expenses--- we were lucky enough to have a larger carryover to cover these expenses-- but the budget would need to be looked at more closely for the following year and what can be purchased.
10 years 5 months ago #163556 by Erica W
Replied by Erica W on topic Re:Does the budget need to balance?
We have a budget line item called "Cash Reserve" set to $5,000 every year. That way we balance our budget to approximately $0, but there is $5,000 allocated to the checking account to start the next year off.
10 years 5 months ago #163552 by gjcoram
There are actually 2 questions:
1) should the budget be balanced for the year (income=expenses)?
2) should there be money left in the bank account at the end of the year?

I agree with the other posters that it's OK to carry over funds, but that doesn't mean that the budget shouldn't be balanced for a given year.
10 years 5 months ago #163548 by korr04
We definitely begin each year with a balance because we have expenses that come up almost immediately such as a Welcome Back Breakfast and membership drive, where we need to spend a little for incentives and such.
10 years 5 months ago #163537 by Rose H
Hi there!

We are weighing in with MIDad here. We advocate having some carry over funds in your bank account so you can start the new school year off without having to immediately fundraise.

Our founder, Tim Sullivan, wrote about this topic in a blog from April 2012:

Rose C.
Community Manager
10 years 5 months ago #163536 by MIDad
Absolutely not! I think it's a mistake to spend down to zero ever, let alone every year, and leave the PTO with nothing in the bank for the following fall. Unless your bylaws specify that you can't carry money over from one year to another -- in which case I think you should amend your bylaws -- it's a good practice to carry some over.

In fact, our bylaws *require* that we leave a minimum balance on hand at the end of the year to start the following year with.
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