During the realization of the project you have periodically checked your real income and expenses against the budgeted amounts and, if needed, you have made adjustments (see „Controlling'). In the final phase the accounts will be balanced.
The final profit and loss analysis should include on the one hand the income statement, which summarizes the incomings and expenses for every single budget item over the whole lifecycle of the project. On the other hand, for every single budget item the deviations from the original budget should be visible too.
Ideally, the total turnover of your project corresponds to that of the budget. This means that you are neither responsible for a deficit nor for a surplus. Otherwise, the executing institution, which is usually responsible for a potential deficit or any of the financial backers, has to be provided with a well documented explanation.
A detailed comparison between your budget and the income statement gives you the chance to re-evaluate the income and the expenditure of your project (or specific parts of it) and provides you with a learning experience that will be invaluable for your next project. Have the available resources been used judiciously and in order to achieve the project objectives? Would a different approach have yielded the same results for less money?
- You do not have time for a final assessment and its analysis, since you are already involved in the next project.
- The central accounting department is responsible for the profit and loss analysis and it uses a different attribution method for each budget item than the one used in the project. A comparison is therefore impossible.
- Deviations from the budget are ignored in your institution as long as you do not produce a loss.
- You did not take controlling into account during the implementation phase.
In health promotion and prevention there is increasing expectation for effects to be substantiated by evidence and for a favourable input – outcome ratio. Careful budgeting, periodic controlling and a final comparison of expected and actual incomings and expenses will allow you to assess input versus benefit. Your next budget will be more realistic if you understand why, in some budget items, there are discrepancies between projected and real expenses.
Create your own profit and loss calculation for your project (or ask the accounting department to do it for you) and, based on the deviations from the budget, learn and draw conclusions for your next project. A modern electronic accounting programme can easily provide a profit and loss calculation, including all discrepancies from the budget. This will be in the form of a report once all project-relevant data have been entered at the end of the project. Use this report in the final discussions with your team and/or with the responsible supervisor of your institution. If you have used timesheets, the actual time devoted to the project can be analysed and can be reflected in terms of project results.
- Are income and expenses in the range of the budget (including any budget changes)?
- Has working time for all activities been recorded in detail?
- Are discrepancies in terms of the budget explained and documented?
- Will the profit and loss calculation be compared to the achieved results and will it be used to assess the input benefit ratio?
Project planning
