Though we’re already a week in 2018, it’s not too late to create a budget plan for 2018. Below we’ve outlined how to get started and what variables to consider when planning.
To get started, complete a financial audit. Pull a report on all expenses. Compare that to total revenue for 2017. How’d you do? Sometimes, the numbers can be challenging to accept; but fleshing everything out can also bring you back to reality and help you develop a plan of attack.
For example, maybe you estimated a certain percentage of total revenue stemming from a large annual conference. Unfortunately, the number of attendees didn’t pan out and your ROI is much lower than predicted. This kind of scenario forces you to look at what went wrong and how you can do better next time. Instead of dreading this experience, see it as an important exercise to strengthen your group.
If you’re tracking all financial metrics through multiple platforms, it may be time to consolidate your tools to one location. AMO has robust reporting tools and integrates with Quickbooks. Give a try for FREE with a 30-day trial.
When pruning your budget, you may realize there are some expenses you just can’t eliminate. Make a list of your necessities – rent, salaries, insurance, financial software, employee needs – and always leave room in the budget to cover these costs. Despite the urge to cut corners here, don’t do it. The above costs are necessary to operate.
Just like you have a contingency budget for a construction project, it’s probably wise to have extra “emergency” funds built into your total budget. Specifically for events. There are always more expenses than you think there will be and it’s best to be prepared.
A Surplus – “Use it or Lose it”
Similar to Michael Scott’s dilemma, keep in mind that if you don’t use your full allotted budget, next years budget will probably decrease. When you’re planning your budget for 2018, think about the money that could be left over. Instead of scrambling end of the year to spend the extra cash, prepare ahead of time by creating a list of possible options. To learn more about how you can spend those extra dollars responsibly, read this article >>> “Use it or lose it” – How to effectively use the rest of your budget
This one can be hard to predict. Variable costs change every quarter and season. If your association is busiest during the summer months, allocate your budget to handle the uptick in activity. Conversely, keep an eye on spending in the slower months.
Consider what variable costs truly benefit your group. Spend money on something that not only feels rights but can be supported by analytics. For more tips on managing your variable costs, check out this article by NerdWallet, a personal finance website.
To learn more about managing your associations budget, see our revenue management category on the blog.