Which characteristic is essential for a good budget document?

A good budget document is characterized by its ability to provide a comprehensive overview of all funds from all revenue sources. This characteristic is essential because it ensures that stakeholders—such as policymakers, management, and the public—have access to a complete picture of the organization’s financial situation. A comprehensive approach allows for better decision-making, as it includes not only the current budget but also forecasts, assumptions, and any other relevant financial data.

Additionally, by encompassing all funds and revenue sources, the budget document can effectively communicate priorities, allocations, and the reasoning behind financial decisions. This transparency is crucial for building trust and accountability among stakeholders. It helps to illustrate how different funding streams contribute to the overall financial strategy and performance of the organization, ensuring that resources are allocated efficiently to achieve desired outcomes.

In contrast, focusing solely on past expenditures limits the budget's relevance to planning and forecasting. Including only quantitative data without explanations can lead to misunderstandings, as stakeholders may struggle to interpret the numbers without context. Avoiding the use of graphics to present data can reduce engagement and hinder the clarity of complex information, making it more challenging for users to grasp key concepts quickly.