Budgeting in Tough Times

Jay SciutoPartner

Tate & Tryon, CPAsy ,

Budgeting in Tough Timesg g g

The purpose of this presentation is to discuss ff i b d i d id i effective budgeting steps and provide cost cutting

tips which could be helpful in tough economic itimes.

Good Budget CharacteristicsGood Budget Characteristics

A budget is a planning tool that should be:

* R li i d d bl i* Realistic- sound and reasonable assumptions

* Flexible- adapt if there are significant changes p g g

* Consistent- in line with assumptions and goals

Successful Budget StepsSuccessful Budget Steps

Determine timeline:Determine timeline:

• Establish dates for milestones

• Earlier the better

• Allow time for analysis/edits

Successful Budget StepsSuccessful Budget Steps

• Establish responsibilitiesEstablish responsibilities

. Determine who has the overall responsibility

. Identify each program’s requirements

d’ l d l. Ensure Board’s involvement and approval

Successful Budget StepsSuccessful Budget Steps

• Establish goals and assumptionsEstablish goals and assumptions

. Identify key program/organizational goals

. Establish financial expectations

d d b d. Communicate and document budgetassumptions

Successful Budget StepsSuccessful Budget Steps

• Analyze current and past budgetsAnalyze current and past budgets

. Determine areas of risk

. Identify items for possible cuts

f h k f h . Learn from the mistakes of the past

Successful Budget StepsSuccessful Budget Steps

• Key points in budgeting revenue• Key points in budgeting revenue

. Justification for projections (increases/decreases)

. Ensure that individual revenue line items are inline with overall assumptionsline with overall assumptions

. Identify areas of risk

Successful Budget StepsSuccessful Budget Steps

• Key points in budgeting expenseKey points in budgeting expense

. Justification for expenses on a line by line basis

. Ensure that individual items are in line with overallassumptionsassumptions

. Identify items that could be further reduced iffuture cut backs are required

Successful Budget Stepsg p

• Budget ImplementationBudget Implementation

. Organizational wide buy-in

. Monitor throughout year and focus on risksidentifiedidentified

. Modify budget as necessary

Expense Reduction TipsExpense Reduction Tips

The remainder of the presentation is to The remainder of the presentation is to provide cost cutting tips that you can i l d i h j di i h implement today without jeopardizing the integrity of the programs you provide to your members and the general public

Expense Reduction TipsExpense Reduction Tips

• Comparison to /dialogue with Comparison to /dialogue with similar organizations

. Employee benefits

Vendors used. Vendors used

. Expense ratios

. Expectation for future periods

Expense Reduction TipsExpense Reduction Tips

• Looking within the OrganizationLooking within the Organization

. Outsourcing options

. Salary analysis

h l l f h k . Ensure authorization levels for check requests.

. Preventive measures for fraud

Expense Reduction TipsExpense Reduction Tips

L ki t id th O i ti• Looking outside the Organization

. Fee reduction options with current vendorsp

. Require multiple bids on all new products/ servicesabove certain thresholdabove certain threshold

. Bring certain functions in-house

Expense Reduction TipsExpense Reduction Tips

Offi • Office space

. Telecommuting option reduces office spaceg p p

. Sub-lease opportunities for unused space

. During downturn in real estate, lock in space atreduced rates