A start-up budget covers one-time costs to open or expand: renovations, furniture, licensing, and the operating losses expected before enrollment fills. An operating budget plans a normal year of revenue and expenses. This course focuses on operating budgets.

Programs keep their books on one of two bases:

• Cash basis: income is recorded when money arrives and expenses when money leaves.
• Accrual basis: income is recorded when it is earned and expenses when they are incurred, whether or not cash has moved yet.

Lesson 2 shows the same month on both bases so you can see the difference.