Accounting & Financial Reporting Focus
DEATH, TAXES AND BUDGETS
For many readers, significant time will be spent over the next few weeks on preparation of budgets. This article by Lt. Colonel Neil Watt will help place this work in its proper perspective.
It is said that there are only two things in life about which we can be certain: death and taxes! Perhaps there is a third: the dreaded budget! Let’s be honest, most of us would gladly delegate this responsibility. If we must do it ourselves, we procrastinate as long as possible.
There are good reasons why we fear budgets. In the development of a budget, we discover our future and it may be one that we would rather not face. Perhaps it tells us that the vision we have for ministry is just not possible. Or it may mean that we are going to have to work harder, raise more funds, connect with more people or cancel certain programs altogether.
For the last 25 years, I have held appointments in THQ and DHQ administration, with budgeting being a large part of those roles. Here are some of the things I have learned about budgets.
- Budgets are more important than we think.
- Budgets are a necessity.
- Budgets benchmark the health of any unit.
- Budgets tell us the story of progress or decline.
- Budgets that are consistently and regularly monitored can help us make timely and critical decisions.
- Budgets either support the strategic plan or they don't.
I guess you could say I have been converted to the importance of a budgetary process for organizations like ours. If you were to ask me to comment on how a ministry unit is doing, the first document I would want to see is its budget and financial statements for the current and last three years. What I have come to realize is that the budget integrates the whole unit and acts as glue, holding all the pieces of ministry together in one document.
During the last two downturns in the world economy, budgets became strategic documents that guided our organization. I was gratified by the importance we placed on adherence to budgets in order to work through difficult decisions. I was also pleased that, although belt tightening took place, it paled in comparison to many other organizations that were drastically cutting staff and programs. That was my point of real conversion to the critical importance of the budget process: The Salvation Army ship had sailed through a storm and stayed afloat while many others did not!
In his devotional book, Leadership Prayers, Richard Kreigbaum devotes a chapter to the subject of budgets. He has figured out the importance of the process. He says: "the budget declares the operative values and priorities of the organization. It also declares our investment in future direction. The budget is a leadership plan and budgeting is a leadership process."
Some of us may think that, because we do “spiritual work” the budget has minimal importance. There is a ‘God-will-sort-it-out’ way of thinking. I suggest, however, that the budgeting process is a spiritual exercise. I resonate with a prayer Kreighbaum includes in his book: "The budget affects every person and every program, so getting it right is extremely important. Every budget line is someone's sincere request, wrapped in our mission and tied with their hopes. I love these people and pray for them. How I wish we could do it all for them...teach me how to do it better this time".
About 10 years ago, Paul Goodyear, Financial Secretary, wrote an article simply entitled, "The Budget". He concluded on a spiritual note that I think is worth repeating. Paul wrote "J. Hudson Taylor is quoted as saying that 'God's work, done in God's way, will never lack God's supply.' First, this reminds me the work we do is God's work. He is the author of the mission. He gives direction. Second, it reminds me I have to do God's work in His way. We want to be good stewards, recognizing our accountability. Third, it reminds me that if I have done my best to carry our God's work in his way, I can be assured of His blessing on my life and ministry."
To again quote Richard Kriegbaum, "The budget – mundane and arcane – is the ultimate leadership forum.” We will be praying that this year the budget process takes on new meaning and becomes a living document, "wrapped in our mission and tied with our hopes!"