Cost: Types & Principles, Budgets and Budgetary Control

Components of Financial Management


Cost Concepts

What is a cost

A cost is the value of money that has been consumed to produce something or deliver a service and is not available for use anymore. Costs are classified in various ways according to needs of organization.

Types of cost
Types of cost in nonprofits
Cost Principles in Grant budgeting

Fund Accounting

What Is Fund Accounting?

NGOs use fund-based accounting to manage grants. Focus is on accountability over profitability.

Types of funds

Budgets

What is a budget?
Excuses for not budgeting
Why Budget?
Pre-Requisites for Budget
Process of Budgeting
  1. Form a Budget Team: Include CFO/CEO, accounting, program, HR, BD staff.

  2. Set Timelines: Enough time for discussions. Start 2 months before year-end.

  3. Decide Goals: Programmatic, financial, strategic (if any).

  4. Draft Budget:

    • Income: Projected income based on expected activities.

    • Expenditure: Program costs documented.

    • Format should be easy and assumptions noted.

  5. Review Draft: See if it meets goals. Adjust based on income/expenses.

  6. Approve Budget: Through committees and board.

  7. Implement Budget: Enter in accounting system. Setup variance analysis.


Types of Budgets

Other types

Balanced, Surplus, and Deficit budgets


Variance Analysis

In grant management:


Points to remember while Budgeting


Journey of Project Budget

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Revision #1
Created 9 April 2025 16:16:23 by Pooja
Updated 9 April 2025 16:22:14 by Pooja