What is an operating budget?

January 19, 2015 5:08 AM

I recently asked someone at work for our operating budget for the purpose of registering for software discounts. I was given a number and it didn't quite make sense to me. I think that there may be at least two definitions of 'operating budget'. The workplace in question is a 501c(3) non-profit if that changes the definition. What would be tallied to make up the operating budget?
posted by sciencegeek to Work & Money (5 answers total)

Best answer: Total annual expenses. You can easily determine this by looking at the agency's last form 990 (line 17) if you want a real number. THIS year's operating budget is fiction until the end of the year, because a budget is an estimate until the fiscal year is completed, but you could still use that number for this purpose, it should be in the ballpark.
posted by HuronBob at 6:06 AM on January 19, 2015 [1 favorite]

Response by poster: Are capital expenses included in an operating budget? Trying to get access to the 990.
posted by sciencegeek at 6:14 AM on January 19, 2015

HuronBob has it. The Operating Budget shows planned/expected/anticipated revenue and expenses, whereas the Profit & Loss (or Operating) Statement shows actual revenue and expenses. There shouldn't be huge differences between the two, unless the organization is bad at budgeting.

No, capital expenses are not included in the budget or the P&L. Those appear on the balance sheet as assets. (Annual depreciation of those assets DOES show up in the budget and P&L as expenses.)
posted by Short Attention Sp at 6:46 AM on January 19, 2015 [2 favorites]

Also, the operating budget should exclude depreciation, interest and amortization, all of which might appear in a non-profit's financial report.
posted by beagle at 6:51 AM on January 19, 2015 [1 favorite]

Hey friend! The 990 is a publicly available document, you don't have to get access to it. Go to guidestar.org, and type in the name of your organization, it will be right there. Send me a PM if you need some help.
posted by juniperesque at 7:25 AM on January 19, 2015 [4 favorites]