Winning the Budget Game

April 16, 2019

For many athletic administrators, this is the time of the year to prepare budgets. Here are tips to take into account if you are in the process of submitting your deparatment's budget the new fiscal year.

An article on the Ohio University Online Master of Athletic Administration website provides the following tips:

  • When are membership fees/dues, fundraising, and donations coming in?

    Forecast the timeframe for when revenue from various ventures will come in by making a calendar. It will take time for the money to be collected and transferred to your department, so allow your budget wiggle room for this.

  • Are the expenses within your department set at a realistic level?
    Use past history and prior reports to determine if your figures make sense. If expenses for one area are not planned for properly, you won’t have the budget for other opportunities.

  • Does the number of members effect the expenses?
    This is important to consider if you decide to expand the participation on a specific team or recreational program, or add a new sport.x

  • Set aside additional money for the possibility of unplanned large expenses, for emergencies, extra travel, damage to equipment, etc.

A blog on accountingdepartment.com offers 10 ways to improve the process by which you forecast your budget.

  1. Keep Things Flexible: Things change as the year progresses, and you need to be able to factor in those changes and how they will affect your business.

  2. Consider a Rolling Forecast and Budget: Under this system, you do separate forecasts for each quarter coming up and not for the entire year. At the start of the process, in providing numbers for your fiscal year, the forecast for each quarter is broader since it wiill be updated at a later date.

  3. Budget to Your Plan, not the other way: The article states, “Budgeting to your plan 'requires that spending decisions be made based on actual revenue, rather than on opportunities that such spending might (or might not) lead to.' Instead of spending and dealing with it later, budgeting to your plan forces you to deal with the potential impact any expenditures will have on the business”

  4. Communicate with All Involved Parties: This will help minimize issues and to ensure alignment between your department's operational and organizational strategies.

  5. Work with Your Entire Team: Asking each division to give you the data you need will increase the likelihood of accurate predictions and a realistic budget.

  6. Establish Clear Goals: Have a clear understanding of what's driving your forecasting predictions to prevent this process from just being a series of guesses.

  7. Plan for Different Outcomes: This can be part of a rolling forecast, which “allows you to pivot as needed based on any new data presented so all decisions are based on what's happening now and not on what happened the previous year.”

  8. Track Everything: The article advises to not underestimate the importance of what some people may consider small details, because they can impact the reliability of your budget.

  9. Establish Goals for both profit and cash flow: They are very different and require a different process to be accurate. But these two area have to work together.

  10. Don't Use Excel: Interestingly, the article recommends the use of budget/forecast planning software, because they are more flexible and secure and should enable you to be more accurate.

 

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