BOMI Budgeting And Accounting Practice Exam

The key idea is to forecast utility costs by how much you expect the building to be used. Utility consumption tends to rise or fall with occupancy, since more people or more activity means more heating, cooling, lighting, and water use. By using projected occupancy changes, you can translate the expected change in usage into a more realistic estimate of next year’s utility costs. For example, if occupancy is expected to be 10% higher, you’d adjust the current utility costs upward to reflect that anticipated increase, while also accounting for any known changes in utility rates or weather. An almanac isn’t specific to your building’s usage patterns and won’t provide the occupancy-driven demand you need for a precise budget. Last year’s assumed rates might be a starting point, but they don’t capture potential rate changes or how usage could shift with occupancy. A verbal agreement with a vendor isn’t a reliable budgeting basis because it isn’t verifiable or formal enough to support a future estimate. So the most reasonable approach is to use projected occupancy changes to estimate utility costs, integrating any expected rate changes as well.