Budgeting

[jgoodpaster]

In 2013 we had extra income which went into our general fund checking account...this income was not all used in 2013. Now we are trying to budget 2014, these unused funds are still in our checking account and we want to include them in the budget for an equal amount for each month of 2014. We cannot include them as income again (or should we)? So if they are not income but budgeted, the income expense report is not in balance. How is the best way to account for these funds for 2014? Just a notation explaining why the income / expense is not in balance?
Thanks!

[Matt]

Let's say you had $12,000 of extra income in 2013, which was sitting in your general fund checking account as of January 1, 2014. If you want to budget to spend this $12,000 equally for each month during 2014 then you would budget an extra $1,000 in one or more expense accounts each month. All other things being equal, the Income and Expense statement will show $12,000 more expenses than income for 2014. However, this is just offsetting the $12,000 more in income than expenses for 2013.

[JohnDMeyers]

*NOTE: I didn't see Matt's reply while typing this, but I think we are both on the same page with our responses*

Your last statement, "Just a notation explaining why the income / expense is not in balance" is what I would call the correct answer.

Some thoughts I have concerning this:

1) Your budget is merely a tool for guiding decision-making.
2) You are correct that showing the money as "income again" is not a good idea
3) You must have had a strong income-over-expense in 2013 if you have "extra money"!
4) The idea of a non-profit organization is to "break even"

Concerning thought #4 above, if you show $2000 of income/expense in 2013, and -$2000 in 2014, that is not a bad thing.