Creating an Event Budget
Event budgets are essential for keeping track of costs, revenue and ensuring costs don’t spiral out of control making the event more expensive than successful. Budget management of these costs is important however with more comprehensive budgets you can start to forecast costs and revenue, give an overview of potential costs changes and review revenue targets for events. Here we start with the basics on what you should initially have on your event budget and how to interpret this.
Detail all the costs for the event, this should include all items for the event, however small along with the quantities of each so that you have a clear picture of how much the overall event costs.
Descriptions, make sure you include the description of the item and what is for, i.e Audio Visual, for Conference room, it can make it easier to find areas to change costs if the event changes.
Group Costs, Group the costs that will be billed together by the same supplier or items that relate to each other or are the same type, making it easier to see all costs that are related to each other.
What doesn’t get included in an event budget? Sometimes budgets can include too much information and you don’t need to include any planning information in this document
Forecasted costs, it’s important to include any changes in costs once the budget has been created, this means if the signage or catering looks like it maybe costing you less than you budgeted for this will give you a more accurate picture of what the total costs will be.
Actual costs, even though you have a forecast column it’s important to include the final costs once the supplier invoices have come in, this actual costs can then be used in a number of ways after the event so it is essential these are accurate.
When to include VAT?
If you event is a corporate event, or run by a organisation they will generally not include the cost of VAT in their budgets as VAT charges from suppliers can be offset against VAT charged by the organisation. However if you are planning a personal event for yourself or family/friends you will have to pay the full VAT amount and cannot claim it back so the prices should include VAT in your budget. Whichever event you are creating your budget for whether VAT or Non VAT make sure any invoices for services and suppliers have the correct breakdown of vat charges so that you can clearly see how much you need to add to your actuals column
What to include when you have a revenue event?
When events have a revenue attached to them, you need to make sure you include these as income in the budget, ideally this should be included at the top of the budget so that it’s easy to see the financial position of the event before all the detailed costs.
This is a quick overview of a event budget and should get you started on creating an event budget, if you want to learn more about creating an event budget or are familiar with budgets or want to use the budget to forecast event changes, like costs for cancelling events, or if your revenue isn’t as expected and if you want to find out how to use budgets to predict a market trend, we have a online course available on forecasting, potential revenue calculations and how to create a new budget for an event, this course is available on online course page.