Creating a budget is an important step in setting your chapter up for financial success. OmegaFi’s budget tool makes creating and maintaining a budget easy and incorporates your budget in accounting reports to save you time!
Creating a new budget
Go to Vault > Accounting > Accounting Tools > Budgets> Add Chapter Budget to create a new budget.
Step 1- Budget Detail:
Create Budget:
- Budget Type – You may create a new budget from scratch or create a new budget from a previous period.
- Select National Template – Select the academic year for which you want to include National Dues and Fees charges.
- Budget Name – Give your budget an intuitive name. We recommend you include the term and year for clarity.
- Accounting Method – The accounting method is set to your organization's accounting type for Form 990 reporting purposes. This is either "Cash" or "Accrual". (See also: What is the difference between cash and accrual accounting?)
- Begin Date – This is the start date of your organization’s fiscal year.
- End Date – This is the end date of your organization’s fiscal year.
- Budget Notes – Enter any relevant notes for the budget.
Create Budget Groups
Budget groups is a function that allows the chapter to separate individual committee budgets or group income and expenses based on their type. For example, you may have a budget group for Housing, Recruitment, Social, Operating, National Dues and Fees, etc.
- Enter the budget group name and click ‘Add’ to drop it down under ‘My Budget Groups’.
- Drag and drop the income and expense accounts under the appropriate budget. The same income and expense account cannot be used in more than one budget group.
Tip: Budget groups may be changed at any time in Vault> Accounting> Accounting Tools> Budget Groups.
Note: Setting up budget groups may not be appropriate for all chapters so this step is optional and may be bypassed by clicking ‘Next’ in the bottom right-hand corner.
Questionnaire
Your answers submitted on the questionnaire tell the budget tool which National Dues and Fees charges apply to your chapter.
Step 2 – Expense:
Budgeting for the chapter’s expenses first is the key to knowing what expenses the chapter will need to pay out during the year and successfully budget income to cover those expenses. The national budget notes display at the top of the page as a guide while setting up the chapter’s expenses. The expense accounts are organized under the budget group they are assigned to. If an expense account is not assigned to a budget group, it will show under ‘Uncategorized’.
- Click the calculator icon next to the expense account code to budget payables for that expense.
- Under ‘Add New Line Item’, enter a description for the payable, the amount and number of expected members this payable will be applied for and click ‘Add New Line Item’ to drop it down under the expense account below. If the expense is a lump sum payable for the chapter as a whole, you can use 1 and enter the full lump sum amount.
- Select the month(s) you expect the chapter will pay this expense. Note: If multiple months are selected you will need to divide the amount by the total number of months For example, amount equals $25.00 if paid in September and $12.50 if paid in September and December.
- Click ‘Save to Budget’ once all line items have been added to be taken back to the main expense page.
Tip: Be sure the following expenses are included in your budget – OmegaFi Service Fee, Merchant Discount Fee (credit cards), and any accounting services if applicable. - Continue to use the budget calculator to enter payables for each applicable expense account
- The § icon next to the expense account code indicates national budget guidelines may apply for that account code. Line items for National Dues and Fees will automatically be posted in the budget calculator for these account codes, but you will need to select the month(s) you expect the chapter will pay this expense. You may also change the amount and estimated number of members if needed. Note: Pay attention to the description of the charge and billing notes to determine which months to select.
- Click ‘See More >>’ to see the scheduled expenses in an expanded monthly view and ‘See Less <<’ to go back to the summary view.
- Once all expenses have been entered, click ‘Continue to Next Step’ in the bottom right-hand corner.
Step 3 – Income:
Now that you know exactly how much the chapter will pay out in expenses, it’s time to budget the chapter’s income to cover those expenses. The national budget notes display at the top of the page as a guide while setting up the chapter’s income. The income accounts are organized under the budget group they are assigned to; if an income account is not assigned to a budget group it will show under ‘Uncategorized’.
- Click the calculator icon next to the income account code to budget receivables for that income.
- Under ‘Add New Line Item’ enter a description for the receivable, the amount and number of expected members this receivable will be applied for and click ‘Add New Line Item’ to drop it down under the income account below. If the income is a lump sum receivable for the chapter as a whole, you can use 1 and enter the full lump sum amount.
- Select the month(s) you expect the chapter will receive this income. Note: If multiple months are selected you will need to divide the amount by the total number of months For example, amount equals $25.00 if income is received in September and $12.50 if income is received in September and December.
- Click ‘Save to Budget’ once all line items have been added to be taken back to the main income page.
- Continue to use the budget calculator to enter receivables for each applicable income account code.
- The icon next to the income account name indicates national budget guidelines may apply for that account code. Line items for National Dues and Fees will automatically be posted in the budget calculator for these account codes, but you will need to select the month(s) you expect the chapter will receive this income. You may also change the amount and estimated number of members if needed. Note: Pay attention to the description of the charge and billing notes to determine which months to select.
- Click ‘See More >>’ to see the scheduled income in an expanded monthly view and ‘See Less <<’ to go back to the summary view.
- Once all income has been entered, click ‘Continue to Next Step’ in the bottom right-hand corner.
Step 4 – Review and Approve:
The final step in creating the chapter’s budget is to review all income and expenses entered for accuracy.
- Use the ‘see more’ and ‘see less’ toggles to review each account code.
- You can click the ‘Budget Amount’ for each account code to view each line item included under that account code.
- It’s important to ensure your income is at least equal to your expenses so the chapter does not run a deficit for the year. Your ‘Net Income’ should always be in the black and never in the red.
- From this page, you may also add or edit budget notes and download various budget reports.
Tip: You can use the blue navigation bar at the top to go back to a previous page at any time while creating your budget. Just click on the step you want to go back to. The step shaded dark blue indicates which step you are currently on.
- Click ‘Save and Complete’ whenever you have finished creating your chapter’s budget.