Financial Procedures: Budgets

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Good financial management of a parish will naturally involve forecasting income and expenditure and monitoring progress against these forecasts throughout the year. As a result budgeting is an essential task for the treasurer and the PCC.

Most PCCs will budget on an annual basis, usually in autumn for the following year, and will need to carefully balance the need to ensure the financial sustainability of the charity whilst striving to grow the resources and mission of the parish.

A good starting place for planning the budget for the next year is by looking at the current year’s income and expenditure and attempting to forecast what these will be next year. Once you have done this you, along with the PCC and guided by the incumbent, should consider what you want to add or remove in line with your missional priorities. Once you are happy with the budget the PCC should have a formal vote to approve it for the following year.

Throughout the year it is good to include an update on income and expenditure against the budget at any finance update. This allows the PCC (or standing/finance committees) to see where they are overspending or have a surplus. As well, in cases of tighter finances, this will highlight when the parish is in danger of running into cash flow difficulties.

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