Budgets - PlanJecting          0053-01        ZZall

                                                - - - Rejoice in the Lord always ... again I say Rejoice !!! - - -


                              TO:  Interested Ministries                                                                         FROM: Jim Bramer, Retired Auditor-CPA
                                                                                                                                                      FILE:  0053-01/all

                               RE:  Budgets - PlanJecting                                                                     Originated:  April 1986


P R E F A C E

       What in the world is "PlanJect", "PlanJections " or "PlanJecting?" Perhaps you think it sounds like another one of those terms that Jim Bramer throws around when he is trying to get a point across - and you are absolutely correct!

        What do you think of this statement:   "Planning is not deciding ahead of time what we will do.... rather, for the purpose of succeeding in the endeavor, it is a prudent attempt to cast a controllable net over the future"   Please access information Here ,  Here   and  Here   for more on this general topic.

         I prefer the "PlanJecting" terminology when Ministries are discussed, because it better emphasizes the essential aspects of "planning" and "projecting" into the financial future. Please consider this more formal definition:

P L A N J E C T

        To convert a ministry's plans to dollars; to prayerfully anticipate the actions of the ministry for a period of time (not necessarily 12 months) and to assign dollars required to carry out these plans in a forthright, understood and meaningful manner.

         It also includes the process of regularly evaluating such planned actions and their effect on the financial resources when planned actions become history and financial resources are received and consumed.

P H I L 0 S 0 P H Y

                        Scriptural principles lead us to believe in such measures as:

  • It is proper to plan ahead.

  • It is meaningful to anticipate the financial future.

  • It is scriptural to step out on faith and earnestly seek the Lord's provision.

  • It is appropriate to live a "disciplined corporate life".

  • It is essential for a ministry to "know where it is" financially -- reduce the risk of financial surprises.

  • It is honoring to the Lord to pay agreed financial obligations when due.

  • It is liberating to have accurate and current records.

  • It is righteous and forthright to have full financial disclosure to those who should know.

  • It is proper to expect those who owe you money to "live up to their agreements".

B U D G E T

   The intent of PlanJecting is to overcome the negatives which often accompany the word "BUDGET", some of which are listed below:

  •   Being presumptuous -- budgeting to take financial actions without placing our faith and trust in the Lord.

  •  Simply rehashing the financial effect of previous years - "If we spent this much, we budget this much."

  •   Being inflexible - not able to respond to legitimate adjustments when they occur. "The budget is a straightjacket, we're being hemmed in."

  •   Not allowing for the dynamics of a today’s ministry as we respond to needs.

  •   Sounding like the world and how they do things. "This is the Lord's doings; He is not bound by a budget."

  •   Not necessary - "We can only spend what comes in."

  •   Giving too much emphasis to the "expense" part of a ministry and not enough to the "income" side of Ministry finances.

  •   Tending to give too much authority and corporate responsibility to the financial historian.

I M P O R T A N T   F E A T U R E S   O F    P L A N J E C T I N G

  1.   The Ministry Executive Officer is the PRIMARY PLANJECTOR -- this person has a "finger on the pulse" of the ministry; and therefore orchestrates its plans and objectives. This person has the overview needed.
     

  2.   The Internal Accountant, sometimes referred to as the Bookkeeper or a similar title, is the SECONDARY PROJECTOR -- too often these roles are reversed. It is the important function of the Internal Accountant to largely be a financial historian and reporter. This person is more reactive than proactive. The Internal Accountant has information at their disposal to "put dollars" to the plans set forth by the PRIMARY PLANJECTOR, with the net financial effect being approved by the Ministry Executive Officer.
     

  3.   It is important that the Ministry Executive Officer (or this person's departmental delegates) accept as fact that the PLANJECTION dollars "belong" to the Ministry Executive Officer and are not the dollars of the Internal Accountant -- all this person should do is put "flesh" dollars to your plan "bones". The Ministry Executive Officer is responsible for approved plans; the PlanJected amounts simply converts them into measurable financial terms.
     

  4.   The measurement of what actually happens as compared to what was PlanJected (often referred to as "actual versus budget") will never be "alive" and result in meaningful management until the resultant PlanJected dollars are actually "owned" by the Ministry Executive Officer.
     

  5.   All parties involved must have a "feel" for the difference between recorded income and expenses (Accrual Basis Accounting) and money which is actually available or used (Cash Basis Accounting). It is best for the PLANJECTION system to reflect the recorded income and expenses even if actual money has not exchanged hands yet, since it is fully reflective of the entire scope of the financial cycle.
     

  6.   We highly recommend that the Internal Accountant utilize a CASH FLOW or MOVEMENT system. This allows for appropriate management of the movement of segments of money, or cash, as it flows in and out of the Ministry.As plans are developed, be cognizant that certain plans actuate certain on-going or fixed financial obligations; others might be one-time or discretionary financial obligations. Be especially sensitive to fixed obligations such as facility upkeep and staff salaries/benefits as you plan the ministry's actions.
     

  7.   Make use of contemporary tools, such as personal computers, to operate and manage an effective PLANJECTION system.

WE WISH YOU GOOD "PlanJecting"!


    The bulk of this Publication originated in April 1986 and UPTD: March 09, 2012   

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