by Natalia Jones

Created on: June 22, 2009

The budget is arguably the most important element of the event planning process. A budget is simply a statement of projected spending that is compiled to act as a guide and yardstick against actual costs. A good budget will therefore display both projected and actual expenses as well as highlight any variance between the two, along with a full description to account for these differences. A complete budget also gives an indication of the income or funding available for the event.

There are several ways to compile an event budget. Some event planners are comfortable using an Excel spreadsheet to keep track of the project costs. This sheet would typically have columns for expenditure titles, actual costs, and estimated costs as well as one for variances. The variance column can be set to calculate the difference of the actual expenses above or below the estimated expenses. The variance column can also be totaled to give an overview of the performance of the entire event. By glancing at this column it would be easy to tell if the event was on target or trending either over or under budget. Costs can then be revaluated and reigned in before getting out of hand.

There are also several specialty software packages that are designed to create and track event budgets. These software packages are similar to the financial software packages such as Quicken and Quickbooks that calculate profit and loss statements and other interesting information from the data captured in its fields. Event planners that prefer to use these financial packages may tend to gravitate towards these options, as they may be familiar with the tools and find the extra information useful. Others may find them cumbersome and prefer to sit with a spreadsheet and plug in the data and get the figures in neat simple columns.

Yet another way of creating an event budget is to download a customizable event planning budget form. These forms can be tailored to suit the specific event, as some fields may not be common to all, for instance tent rentals are specific to outdoor events. These forms are easily customizable and usually involve simply checking or un-checking items from a list of possible choices.

The income side of the budget must also be addressed. The project should start with a cash injection or down payment from which expenses such as booking fees and retainers are paid. Fleshing out the details of the expense items will help the planner to decide when the next cash payment should be made. Inflows should be recorded on the budget as well to give a full picture of how much of the event's expenses are fully paid for how much are still outstanding.

Budgeting for an event is no different to doing your personal finances. In both instances you have a finite amount of funds available to accomplish certain tasks and must ensure that you stay within what you can afford. The difference with the event planning budget is that you are spending money provided by your client and so you are accountable them, and may be called upon to explain the intricacies of the budget you prepared.

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