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Budgeting: Non-Profit vs. Profit

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How does using a budget differ between a government and a for profit entity?

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The budget is used with a different focus, as the profit focus is different in each type of entity. In a for-profit entity, the focus remains on generating a profit. In a government and/or non-profit entity (because not all non-profit entities are under the government realm), the focus is centered on having enough cash flow ...

Solution Summary

This solution explains how and why budgeting is different for governmental and/or non-profit entities versus for-profit entities.

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So your new accountant could practice the budgeting process in your for-profit company, you want her to compare budgeting methods for two different kinds of entities.
You give her information for a for-profit and for a nonprofit entity and ask her to complete the following:
Use the assumptions and data in the attached excel sheet. (there are two tabs)
1. complete next year's budgeted figures for each entity within the same Excel worksheet (yellow cells)
2. include your reasoning for most of the budgeted figures (green cells)

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