Approved Budget vs. Year-end Forecast

A budget is a forecast or financial plan made with the best information available at a point in time. As an organization progresses further into the budget year, it only makes sense that better information will become available that would change the previously expected outcomes for various line items. However, unless there has been a truly major change in the organization's structure or programs, it is generally not a good practice to change the budget once it’s been approved by the board. It’s better to create a column on the financial reports that shows a Year-End Forecast, or Year-End Projection, based on the more recent information, and to explain any significant variances from the original/approved budget. The Year-End Forecast/Projection is often a better reference to use than the original budget in building the following year's budget. See the “Statement of Activities” page  of the Internal Reporting section of this website for further details on report formatting.