Every organization has a different way of handling departmental budgets. Some companies have decentralized budgeting, where each department has its own set of books. Others have centralized budgeting, where there is only one set of books, and every department answers to a single centralized team.
That said, it’s always a good idea to have a department budget template at your disposal. A department budget template will help you understand where your money is going in the coming year. It’s an easy way to keep track of how much money each department has left before they hit their predetermined spending limit for the year.
This article explains everything you need to know about departmental budget planning and how to use a department budget template.
What is departmental budget planning?
Departmental budgeting is the process of forecasting income and expenses for each department of a company for a given period of time. Typically, departmental budgets are done on an annual basis to plan for the upcoming year. This type of budgeting allows you to plan how you will spend your money and which departments need more funding.
Departmental budgeting is essential for companies that want to stay afloat for the long term. It may seem obvious, but the first step to creating a departmental budget is to identify each and every department that exists within your organization. This will help you understand how the money flows within your organization and where it is best spent.
How do you write a department budget?
When writing a department budget, it’s important to first identify the money coming in and out of your company. You can do this with an income statement and a cash flow statement. Next, you need to forecast where your money is going to be spent. This will help you understand your company’s spending habits and determine where you need to adjust funds. Once you have all the information needed, you can start to write a budget.
You can follow these steps to create a department budget template:
1. Start off by determining each department’s budgeted amount. Be sure to factor in the funds that each department will need to complete its tasks.
2. Next, add up all your incoming cash sources, like sales, grants, etc.
3. Then, add up all your outgoing cash sources, like salaries and supplies.
4. Finally, subtract your outgoing cash sources from your incoming cash sources to find your remaining cash. This will inform your budget for the year.
Some people are intimidated by the thought of creating a departmental budget, but it’s really an easy task. All you need to do is follow the steps above and plug in the numbers from your company’s balance sheet. You can make the process even easier with a premade budget template in Excel.
How to create a budget template in Excel?
If you’re creating a budget template in Excel, the first thing you’ll need to do is create a table. Since you’re creating a budget, you’ll want to make sure that each category is broken down into subcategories. Once you’ve broken down your categories, you can start adding numbers for each subcategory. This is where you’ll input all of your budgeted numbers.
Once you’ve added all these figures, you can start to look at your total budgeted numbers. This will help you determine how much money each department needs if any at all. Once you’ve completed your template, you can share it with your company to get a general idea of how much money each department will receive for the year.
Is there a free budget template in Excel?
Yes! There are many free program budget templates, staff budget templates, and department budget templates online. Most of them are free to download and can be customized to suit your needs. The trick is to find one that is geared toward your specific industry. This will minimize the amount of time you need to spend customizing the template and will make it much easier to fill in the blanks.
One of the best sources for free budget templates is LiveFlow. The platform features a ton of different accounting and finance templates that are all easy to use and can be customized to suit the needs of your company. LiveFlow also offers a bunch of great tools that you may want to try, so be sure to check them out.
Conclusion
A budget is a plan for your money that helps you determine how much money is coming in and how much money is going out. Creating a budget will help you determine where your money is going and how you can adjust your spending habits to save more money each month.
A departmental budget is a forecasted financial statement that displays how your company will make money and spend money in the coming year. This type of budget is essential for companies that want to stay afloat for the long term.
You can easily create a departmental budget template in Excel, or you can download one online, either way, it will help your company stay on track and reach its financial goals.
Recommendation
If you want to make your accounting and budgeting processes much easier then be sure to check out LiveFlow. The platform features great templates and features that can automate the most complex accounting tasks. One of the best features of LiveFlow is the new Live Budget vs Actuals tool, which can save you a ton of time when creating and analyzing your budget. You can explore the platform risk-free with a 30-minute demo, so be sure to try LiveFlow today.
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