Budget preparation and expense monitoring are important aspects of event planning. Here are some tips for staying on track financially.
Preparing a budget
The first step in creating a budget is to estimate the expenses of the meeting. Develop a comprehensive list to ensure that all possible expenses are listed. Expense estimates should be as accurate as possible. Add a specific percentage for inflation if your event is a year or more out. Expenses are categorized as either fixed expenses or variable expenses. Fixed expenses do not change, and they are not dependent on attendance. Variable expenses are per-person expenses that change depending on the number of attendees, exhibitors, and so on. For example, a fixed expense would be room rental and a variable expense would be food purchases. Remember to include contingency fees, cancellation charges, complimentary registrations, and additional labor or overtime. You will need to determine in advance which budget number, pro-card, or other revenue source will be used for the event or meeting. Consult with your department budget coordinator.
THE MOST TYPICAL EXPENSES ASSOCIATED WITH A CAMPUS EVENT:
- Facility rental fees
- Rentals, such as tables, chairs, easels, poster boards, tents
- Media/technical support
- Audio-visual equipment rentals
- Public Safety detail
- Speaker costs (honoraria, travel, meals, hotel, etc.)
- Food and beverage
- Temporary staffing
- Design and production of print material
- Printing, photocopying
- Advertising
- Signage
- Shipping and postage
- Production
- Flowers, balloons, decorations
- Gifts, amenities
- Transportation
- Parking
- Music
Sources of income to offset these expenses include sponsorships, registration fees or tickets, program advertising, and exhibit booths. After preliminary income and expenses are calculated, you should do a break-even analysis. The analysis will show you at what point the meeting income will cover expenses. If your financial goal is to break even, the analysis will show you how many attendees, exhibitors, and what other income (like sponsorships) you will need to achieve your goal. If you hope to make a profit, the profit must be added as an expense. If you need assistance calculating break-even points or developing a budget, please call the Office of University Events.
Monitoring expenses
At periodic intervals during the planning stages, you should monitor your projected expenses. This allows you to change financial direction, if necessary.
Documentation is important at all stages of the budgeting process, beginning with an accurate estimate and ending with an analysis of the overall results. Budgeting guidelines and documentation should be established up-front and followed throughout the planning process. Even the smallest meeting or event should have backup documentation of costs.
When you call preferred vendors for price quotes, get the price quote in writing with a full description so you can monitor what you are actually buying. Creative alternatives can also be very effective and satisfy your budget. Ask the vendor about creating a similar effect with less money. There is no harm in trying to negotiate if you have something to offer the vendor, such as definite future business.
Sales tax
Northeastern is a tax-exempt organization. Our tax-exempt number is 04-1679-480. Watch your event invoices to make sure that you are not being charged sales tax. The tax-exempt number appears on all pro-cards. This number must be given to all vendors by the cardholder at the time of the transaction to exempt payment of state sales tax. If a sales tax is billed incorrectly, it is your responsibility to dispute the charge. If a vendor requires a tax-exemption certificate, ST-2 and ST-5 forms are available online at www.neu.edu/ap.
Purchases exceeding $3,000
University purchasing policy states that any transaction exceeding $3,000 requires competitive bidding and written quotations. Under certain circumstances, the Purchasing Office may waive the competitive bid requirement. If you are purchasing goods or services from a vendor for an event in excess of $3,000, please consult with the Purchasing Office at ext. 4794.
Handling funds
University policy requires that all monetary transactions be handled and overseen by the Finance Department/Cashier’s Office. No department or employee outside the Cashier’s Office is authorized to accept cash on behalf of the University at an event. All banking arrangements must originate in the Treasurer/Controller’s Office.
No department may open a bank account on behalf of the University, including, but not limited to checking/savings accounts, merchant credit card accounts, Internet banking, and transaction processing accounts.
If an event involves collecting cash on site at the University, a representative of the Cashier’s Office must be present to collect the funds, or arrangements must be made in advance with the Cashier’s Office for payments to be made at the Cashier’s window.
If you have any questions, please contact ext. 2366. Also, if cash transactions must occur at an event, Public Safety may mandate a paid police detail on site at your expense. For additional information, contact the Public Safety Division at ext. 5290.
Registration funds
If an internal department or external client is collecting money during an event, such as on-site registration, follow these steps:
- Notify the Cashier’s Office at ext. 2366. The Cashier’s Office may require that a University cashier be present at registration.
- Depending on direction from the Cashier’s Office, at the end of each day of the event, you will need to go to the Cashier’s Office to make deposits from registration or other event proceeds.
- If cash and/or checks are received at registration or elsewhere during an event, Public Safety may mandate a paid police detail, at your expense. Contact the Public Safety Division at ext. 5290.
Rent and other payments from external groups
If you are hosting an outside group for an event at the University, in most cases you will be working with the Office of University Events to prepare a contract for the group, to determine the facility rental charges, and to estimate direct costs associated with the event for goods and services provided by other University departments. The Office of University Events will prepare the event contract, collect facility rent, and deposit that rent with the University.
If there is an occasion when you are dealing directly with an outside group, the contract requirements remain intact, and you are obligated to deposit rent with the University.
In addition to facility rent, it is likely that an outside group will require goods and/or services from other University departments. These charges are estimated in advance and noted in the event contract. Payment for these goods and services must be collected from the outside group for the estimated amount in advance of the event, in addition to rent.
After the event is concluded, you will receive invoices from Northeastern service providers. You should reconcile the estimated versus actual charges. If adjustments are necessary, you must invoice the client for the additional amount due, or credit the client the amount of the overcharge.
It’s always best to work with the budget coordinator in your department, and we urge you to contact the Office of University Events before you begin work with an outside event group.
Depositing income
If you are receiving income related to a University event (for example proceeds from ticket sales, exhibitor booths, sponsorship money, or advertising income), that income must be deposited with the University. Consult with your department budget coordinator for the proper deposit procedures.
Paying invoices
It is important to set up an event financial file early on in the planning, and to keep copies of all documents related to income and expenses, including the event contract, checks received, deposit slips, invoices received, internal budget transfers, receipts for pro-card payment, and invoice approval forms.
To pay an internal department for goods or services related to a University event, use a journal entry form. Your budget number is the account to debit. The journal entry form must be signed by the proper department authority. All originals go to the Budget Office. Send copies to the appropriate department and your budget coordinator and keep copies for your event financial files. Consult with your department budget coordinator for help on completing the journal entry form.
To pay an invoice to an external vendor for goods or services related to a University event, consult with your department budget coordinator for the correct method of payment. Note: Pro-cards cannot be used to purchase alcoholic beverages or catering services when a signed contract is required. Invoice approval forms and journal entry forms are available from your budget coordinator. Include your budget number when completing this form. Originals go to the Accounts Payable department in Richards Hall. Accounts Payable will send payment directly to the vendors. Keep copies of the form and the invoices. Give copies to your budget coordinator and keep copies in your event financial file.
Closing out an event budget
After an event is over, you should review and reconcile your final budget. It is also helpful to review the estimated vs. actual costs for expense. Event invoices should be approved and submitted to your department’s budget manager as soon as possible for payment. If you have questions or need guidance preparing an event budget, please contact the Office of University Events.
Sample budgets
EXAMPLE: The English Department is planning a two-hour special lecture with a featured guest speaker from out of town. The speaker is staying overnight at a local hotel. The department expects 100 guests from the community and the campus to attend the presentation. There is no charge to attend. A reception will be held after the speaker’s presentation.
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EXPENSES |
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EXAMPLE: The Office of Institutional Diversity and Equity is hosting an off-campus group, the National Association of Affirmative Action Deans, for a two-day association meeting at Northeastern on a weekend in the summer. The program includes general sessions and workshops. Two hundred guests from around the nation will attend. There is a registration fee of $250, which includes teaching materials, five meals, a reception, and one night’s stay in the campus dorms.
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EXPENSES |
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REGISTRATION INCOME 200 x $200 $40,000 |
$40,000 |
Please note: both examples and itemized costs are fictitious.