Successful Financial Management

1. Successful Financial Management (Planning and Budgeting Process)

2. Session will provide participants an introduction to the planning and budgeting process. At the end of the session, participants will understand a typical institutional planning process, the role of budgeting in the overall planning process, and how to manage your unit’s budget.

3. Planning Process Why Do We Need to Plan?

4. European Vacation

5. Purpose of Planning • To assist the entity in designing and then achieving its mission, goals and objectives. • To identify and allocate the resources needed to achieve our goals, and to help us avoid risks.

6. Benefits of a Well-Structured Planning Process • Clearer direction and purpose • Increased accountability (taking ownership of actions & outcomes) • Tool to measure success • Ability to deal with change and unknowns

7. Types of Organizational Planning Strategic Planning • Clearly defining the mission and vision statement for the organization • Identifies where we are going and how we will get there • Strategic plans are long term, flexible, and involve many levels of the organization.

8. Operational Planning • Operational plans are short term and narrow in scope, dealing with the operational activities of the organization. • Annual operating budgets are derived during the operational planning phase.

9. Budgeting Process What is Budgeting?

10. "A budget is just a method of worrying before you spend money, as well as afterward." — Unknown

11. What is Budgeting? • The continuous cycle of planning and evaluation used by an entity in order to achieve the stated goals and objectives of the organization. • The process of allocating a finite amount of resources to the prioritized needs of the organization. • A tool we use to control spending decisions.

12. Why is Budgeting Important to the Entity? • A comprehensive planning process is vital due to the scope and diversity of operations conducted in higher education. • Budgeting improves decision making by delegating spending authority and providing accountability. • Budgeting allows management to monitor where the organization is by tracking and evaluating spending decisions.

13. Who is Involved in the Budgeting Process?

14. Types of Budgets

15. Budgeting Process

16. Budgeting Process

17. Budgeting Process

18. Budgeting Process

19. Common Budgeting Mistakes

20. “It is always better to know where your money is supposed to go rather than asking where it went.” — Unknown

21. Financial Reporting and Monitoring The budget is done…What do we do next?

22. Financial Reporting The process of providing information to assist users in comparing planned revenue and expenses to actual revenue and expenses.

23. Financial Monitoring Review and analysis of the financial statements to determine whether resources were used in accordance with the adopted budget and whether the unit was effective in obtaining the stated goals and objectives.

24. Responsible Financial Management • Be knowledgeable of your budget. If you don’t build your own budget, make sure you understand what assumptions were used. • Use a budget worksheet or the available financial statements to monitor your revenues and expenditures • Identify potential risks to your budget as early as possible. Keep your supervisors informed.

25. Responsible Financial Management • You are a steward of the university’s resources, so handle your unit’s budget as if it were your own checkbook.

26. Recession Humor Disclaimer: This is not our travel policy!

27. Corporate Cost-Cutting Policy Due to the current financial situation, changes will be made to the Business Travel standards and Procedures Manual. Effective Monday, the following revised procedures apply: Lodging All employees are encouraged to stay with relatives and friends while on business travel. If weather permits, public areas such as parks should be used as temporary lodging sites. Bus terminals, train stations, and office lobbies may provide shelter in periods of inclement weather. Transportation Hitchhiking is the preferred mode of travel in lieu of commercial transport. Luminescent safety vests will be issued to all employees prior to their departure on business trips. Bus transportation will be used only when work schedules require such travel. Airline tickets will be authorized in extreme circumstances and the lowest fares will be used. For example, if a meeting is scheduled in Seattle, but the lower fare can be obtained by traveling to Detroit, then travel to Detroit will be substituted for travel to Seattle.

28. Corporate Cost-Cutting Policy (continued) Meals Expenditures for meals will be limited to an absolute minimum. It should be noted that certain grocery and specialty chains such as Costco and Sams stores often provide free samples of promotional items. Entire meals can be obtained in this manner. Travelers should also be familiar with indigenous roots, berries, and other protein sources available at their destinations. If restaurants must be utilized, travelers should use "all you can eat" salad bars. This is especially effective for employees traveling together as one plate can be used to feed the entire group. Miscellaneous All employees are encouraged to devise innovative techniques in effort to save company dollars. One enterprising individual has already suggested that money could be raised during airport layover periods which could be used to defray travel expenses. In support of this idea, red caps will be issued to all employees prior to their departure so that they may earn tips by helping others with their luggage. Small plastic roses and ball point pens will also be available to employees so that sales may be made as time permits.

29. Credits • Fred Nesler, Creighton University Budget Director • Ron Rael, “Creating Great Budgets: A Review of Budget Basics” (an AICPA CPE Express Course) • NonProfits Assistance Fund: NAF Financial Foundations