A well-written budget lays out every financial detail of your community that can be anticipated. It shows the sources of income, how much each will generate every month throughout the coming year, and any projected increases from any income source during the year. Expenses are listed as you expect them to occur, with seasonal adjustments for the appropriate items.
By making the budget as accurate as possible, it will work with you in helping you reach the financial goals of your community. Operational decisions should be made only after consulting the budget. In emergency situations, the budget can help you re-align expenditures for the remaining months of the year. At all times, you will know exactly how close you have come to reaching your monetary objectives for the year.
Even though a budget typically is written to cover a 12-month period, it is broken down on a month-by-month basis. When you look at anticipated income and expenses in bite-sized pieces, it is easier to keep the numbers accurate and on target. It is also easier to make corrections should some unforeseen event cause you to stray from your original projections.
Most communities collect rent on a monthly basis, although a few collect annually. For the bulk of the operations that collect each month, this format allows the income shown on the budget to be adjusted as you anticipate changes. These changes would typically include move-ins, move-outs, model homes being sold, rental incentives beginning or ending, and rent increases. In some cases, each resident has a 12-month lease, beginning when they move in. This monthly format then allows an astute community manager or owner to project the exact amount of increased income to expect in any one month.
Expenses do not remain constant throughout the year. In most climates, there will be a seasonal fluctuation in gas, electric, pool expenditures, and perhaps even personnel. Planning for the future on a monthly basis is the only way to accurately reflect these variations.
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I wish I could write like you as Margaret Laurence once said “When I say “work” I only mean writing. Everything else is just odd jobs.”