BUDGET

Developing A Management Business Plan,

and the Business Practices Needed to be Successful

The definition of insanity is to continue doing the same thing you’ve been doing, but expect different results.

If you want to improve your Lodge’s finances, reviewing existing practices, setting and evaluating goals and developing tactics to accomplish those goals are a key step in success.

PURPOSE OF THE PLAN / WHY PLAN?

  • Improve bottom line results through involved management planning.
  • Train the Exalted Ruler and Officers in the business operations of the Lodge.
  • Historical we teach the rituals, statutes, functions, etc., but no business training.
  • Suddenly the Officers are responsible for a budget they may not understood or may not have even seen.
  • Preserve the continuity of the business operations of the Lodge is hard.
  • Corporations do not change CEO's, CFO's or Directors every year.

PLANNING TEAM

Exalted Ruler, Leading Knight, Loyal Knight, Lecturing Knight

Secretary, Treasurer

Trustees

House Committee, Audit Committee, Legal Counsel

Any Other Members

WHO ELSE; WHAT DO THEY OFFER?

STEP 1 – BUSINESS PLANNING PROCESS

  • Obtain the most recent Annual Financial Statement for each Lodge entity and restricted accounts. (Lodge, Bar, Dining, Swim Pool, Golf Club, Bingo, Charity Reserve, Building Fund, etc.)
  • Review each individual General Ledger Income and Expense Account to identify:
  • Problems and opportunities that will improve revenue or reduce costs and expenses.
  • This should include major maintenance and capital expenditure.

STEP 2 – BUSINESS PLANNING PROCESS

  • Prioritize solutions for the best end result possible.
  • Limit the number of proposed solutions to manageable size so that things get done well.
  • There is only so much water in the glass. You can not be working on a unlimited number of items at once and be effective and we as Lodges do not have unlimited money.

STEP 3 – IMPLEMENTING SOLUTIONS

  • Once solutions are ready to be implemented, you have to determined:
  • What is to be done
  • How it is to be done
  • Who is going to do it, and
  • When it is to be done
  • Everyone must march to the SAME drum.
  • Create buy-in to get your team onboard.
  • The more people working together, as a team, the more likely your plan will be successful.
  • This is like putting on a Lodge event on, (Oktoberfest, Sweetheart Ball) the more people working on it, the great the success.
  • The same scenario applies with this plan.

STEP 4 – ANNUAL BUDGET

  • Once steps one through three are completed, it is much easer to build your Annual Budget and to be able to complete it by each entity, get it finalized by the Board of Directors and submitted to the Lodge for adoption.
  • The monthly breakdown of the Annual Budget should not simply be divided by twelve.
  • Bar and food sales should be realistic;
  • Grand Lodge and State Dues are paid in April;
  • insurance, property taxes and licenses are generally paid in specific months
  • Your year-to-date budgeted amounts should represent your best estimate of where you intended to be at any point In time making comparison to actual and resulting variances meaningful.
  • When completed, your Budget becomes your road map for accomplishing your financial goals for the year.
  • These steps will give you a good look at your operations, capital additions and cash flow.

STEP 5 – MONTHLY REVIEW OF ACTUAL TO BUDGETED RESULTS STEP

  • Once you have stated the year, on a monthly basis compare the actual to budget numbers.
  • Note each variance that the budget and actual are not in line and find if this variance is standard (a change month to month) or caused by an outside source or an unbudgeted problem.
  • Make sure that the voucher system is used correctly, so expenses are recorded correctly with the correct controls in place.
  • At six month look at you budget and make sure that your team is still going to meet the goals set forth in your plan.

BUDGET PROCESS

  • Budget by Entity. Develop SEPARATE budgets for the Lodge and the Club.
  • Other entities may need their own budgets; Bingo, 501(c)3 Corporations, Golf Course.
  • Utilities can be split between Lodge and Club to balance individual budgets.
  • Profit can be budgeted to create an overall balanced budget when combined.
  • Include significant line items but be careful about too much minutia.
  • “The Board shall present a segregated budget not later than the final regular meeting of the Lodge in April…must be accepted at the next regular meeting...” - sec 12.070

VOUCHERS

  • Vouchers are the paper trail for accounting and auditing processes.
  • EVERY payment needs to be documented.
  • Form doesn’t matter; function is important.
  • It can be a full-sheet, half-sheet or rubber stamp.
  • Data elements tie the trail together; account numbers, category/event, date, check number.
  • Approval chain is critical to proper accounting and loss prevention. This is the double-check that honest officers don’t mind completing to demonstrate that they are operating in the best interest of the membership. “Trust but Verify”

BILLS AGAINST THE LODGE

  • Be sure to note the date range, and begin the next where the last one ended.
  • Make all information available to members by reading each item or making a printed version available.
  • Note WHO was paid and for WHAT.
  • Note the big players.
  • Members will have favorite line items they are interested in, and may have questions when bills are higher than usual.
  • Recurring bills can be authorized for payment prior to approval at the first meeting of each Lodge year. ALL bills still require approval. This authorization allows the payment, but the reporting is about member’s awareness.

RECEIPTS OF THE SESSION

  • Include amounts and line or description of expenditure.
  • If summary info is read, make detail available for member review.
  • No vote necessary to keep the money!

TREASURER’S REPORT

Include all investment accounts.

Specify what amount is “restricted” versus available for operations.

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TESA Officer Training – 2016Budget