As I was reading the book “The Business of Child Care Management and Financial Strategies” it pointed out some very good information to know and understand when it comes to budgeting. First a person has to have an “Estimating Monthly Budget Amount” when running any type of organization, company, or business. (Jack, 2005, p. 72) That is when a person usually tracks their monthly revenue and expenses. This means tracking the finances of income coming into the organization and the expenses that are going out of the organization. This is very important because this will tell the person how much of a profit the company has gained for each month. Just like the author stated, “When you break …show more content…
(Jack, 2005, p. 72) The book talks about the Felton Family Preschool and their budget plan for each month. Jack gives an example of the budget on page 73 for the twelve months in a year. The author stated, “In order to determine the monthly budget amounts, you can divide the annual amounts by 12 for each monthly amount”. (Jack, 2005, p. 72)
Now as I analyzed the monthly budget for the Felton Family Preschool I see that each month has an equal amount for each individual line. As I continued to read on I have noticed the two-month’s budget versus the actual for Felton Family Preschool. For the two-month’s deficit the preschool was not doing well in October. The tuition, fund raising, salaries for the staff, and expenses were more that the budgeted amount. So it caused the organization to be in the negative for the two months. The owner needs to sit down look over what went wrong between these two months and figure out a plan for the tuition, fund raising, salaries …show more content…
Reducing the salary for the staff by $19,800 will be the first on the list. The salaries-staff has to net a surplus of $1,750 each month. The author has given a good example of how the staff salaries should look. Now there are ways to get the deficit down and the author do gives some examples on how this can be done. Jack gives the readers three questions along with ways on how to fix it. First Jack stated, “Is a year-end deficit of $6,282 acceptable? ,Is a reduction of 125 staff hours a month something that can be accomplished without jeopardizing program quality?, Are there additional savings that can be realized?, and finally Can we increase enrollment or tuition fees during the next five months”? (Jack, 2005, pp. 95-100) These questions are some very good question to be asked and the author also supplies the information on how to do these things and still have a functioning organization. In the end I have realized how important a budget is for any organization and the budget has to be an accurate number that will bring in profit for the organization. The Felton Family Preschool has opened my eyes to how an organization can go into the negative but it can be fixed if tracked. That’s why it is so important to have a budget; projected numbers to see how well the organization will