We all know that our budget is a critical financial management tool for finance managers, CFOs and CEOs, but it can also be used in a number of other ways. Here are a few additional uses that can reap positive results:

1. Embed responsibility for line item budget management in the job responsibilities of everyone on your senior management team. Creating projections, managing a budget, and reporting regularly on budget v. actual is a critical management skill for your entire team, not just your finance manager or CFO.
2. Empower your staff and Board at all levels (even front lines) with a budget overview. High level overviews might include the major line items with pie charts, with more detailed reviews on an as needed basis. When your entire team knows the goals that you need to achieve for both expense management and revenue, they'll understand your decision making in a new way, and be more invested in helping reach those goals.
3. In addition to regular income/expense statements and balance sheets, include budget v. actual statistics in routine board information (either rolled up or in detail depending on your organization). Highlight line items that are doing well in green, caution areas in yellow, and "yikes-we're-way-off-target" areas in red so that you are making it easy for your volunteer leaders to grasp trouble areas in advance.
4. Incorporate regular budget revisions into your planning process (many organizations do revisions quarterly or semi-annually). This allows you to keep the budget alive and relevant, and may drive key decisions before you head into a trouble zone. Of course, if you're completely on track in all areas, no revision may be necessary...just give lots of praise to your team instead! You may even want to establish some team incentives that are tangible rewards.
5. Most funders and donors ask for a copy of your current year budget in addition to past year financial statements and project-specific budgets. Even if not requested, make sure to provide it and attach a discussion of the figures so that they can understand the policy decisions and numbers that drive each significant line item. You will have answered most of their questions in advance, and they'll know that you have a strong grasp on your finances.

How else do you creatively use your budget as a tool?

Are you a financially savvy leader? If so, you already know that strong leaders make it a point to set financial targets and stay actively involved in monitoring them on both the revenue and expense side. Not only are you better able to steer the ship effectively on an ongoing basis, but your organization will also be more nimble and much better equipped to navigate effectively through challenging financial times.

20 Questions That You Should Be Able to Answer At Any Given Time About Your Organization's Financial Health:

1. For each revenue line item, are we meeting our goals? If not, how much are we off, and do we have an explanation for why?
2. What are acceptable variations and fluctuations in expected revenue?
3. If our revenue is seasonal, have we set calendar-based targets so that we can accurately project cashflow?
4. How much of our revenue is sitting in the "receivables" bucket?
5. If payments were invoiced, and expected, but have been delayed, what is our plan to assertively pursue that funding?
6. If delays are inevitable, what is "Plan B" for meeting cashflow expectations?
7. Do we have a line of credit that we can use to get through lean cashflow periods? How much and how frequently have we already drawn?
8. Are there any revenue areas that are showing unexpected increases, and if so, are there some expanded possibilities for continuing to grow this area, or was it a one-time anomaly (e.g. an unexpected bequest)?
9. Where are we most under-performing on revenue relative to goals? How are we going to get back on track?
10. Are our revenue goals still reasonable in light of our changing environment? If not, do we need to consider a budget modification?
11. Is there an existing or expected cash surplus? If so, how can we best use it to ensure sustainability of the organization over the long haul?
12. What are our largest expense line items?
13. Do we have any cushion built into those line items for unexpected costs or unplanned increases?
14. What expense areas are rising, and why? Did we anticipate this when we budgeted, and if not, why not?
15. If revenues are under goal, is a deficit permissible, or do we need to reduce costs concurrently?
16. If we are planning to reduce costs, which are the areas that we will target, and how will we implement?
17. Have we re-evaluated vendor services and contracts to try and re-negotiate lower-cost contracts? More on cost-containment and cost-reduction strategies.
18. Are there programs that are under-funded or under-performing that we should consider ending? What kind of action do we need to take to move forward with doing so?
19. If a deficit budget is permissible, how will we finance that deficit? Do we have an endowment that we will tap? Will we use a line of credit? What amount of deficit is permissible and for how long? More on endowments and rainy day funds.
20. How are we going to share this information with the Board and staff team? Are there financial dashboards that we could create and monitor? More on dashboards.

Can you answer all of these questions?