College and university budget cycles can be long and painful, but if you take time to assess and optimize your process, they don’t have to be. With the right strategies, it’s possible not only to shorten the budget process, but also to make better and more accurate planning decisions. Below, we explore five common challenges and proven best practices to address each.


#1 — Automate Data Integration to Inform Budget Drivers

Collecting and inputting budget data is often a cumbersome, manual process for colleges and universities. Deans and institution leaders must request data from multiple departments, which is typically delivered as static reports or standalone spreadsheets. However, because the average budget cycle lasts four to six months, this data must often be updated as the year and budget process progress. This can create an endless cycle of data requests for updated actuals and manual data input, not to mention version control issues. Instead, institution leaders can streamline this process by:

  • Automating data imports from payroll, human resources, student, and other systems and sources
  • Integrating software solutions to share data and utilize one input source, which reduces time, errors, and manual maintenance
  • Facilitating real-time updates to quickly reveal the impact of assumptions as data from different departments is entered or changed


#2 — Work Efficiently

Over the past several years, the length of higher education budget cycles has increased. Syntellis’ 2022 CFO Outlook for Higher Education report revealed 35% of finance leaders experience budget cycles that exceed six months, and more than one-third report that their budget cycle does not give them ample time to conduct value-added analysis to inform strategic decisions. It’s clear that inefficiency is standing in the way of more meaningful planning.

To improve budget and planning efficiency, follow these best practices:

  • Use simple, customizable templates to streamline the end-user process and improve understanding
  • Design workflow processes that easily define and track steps, notifications, reminders, and statuses


#3 — Align With Institution Strategy

College and university budgets can’t be short-sighted. To achieve goals and more effectively plan for the future, deans and department leaders must align budgets with the institution’s short- and long-term strategy. Incorporating strategic planning, budgeting, and forecasting into a single, integrated process can dramatically improve financial management in higher education institutions. To do this, you must align objectives and behaviors by:

  • Creating a strategy map that compares forward-looking budget models to current plans
  • Assigning key performance indicators (KPIs) and creating a success measure for each goal
  • Aligning goals and sub-goals across departments.

Then you’ll need to streamline strategic planning, budgeting, and forecasting processes to assess performance and improve alignment, consistency, efficiency, and transparency. Consider this planning cycle:

  • Develop a strategic plan: Provide a high-level roadmap of where you want to go as an institution
  • Create an operating budget: Develop a detailed tactical plan outlining how you will achieve the first year of your strategic plan
  • Execute plans: Communicate plans across the institution, including success metrics, and ensure each department has the resources to achieve goals
  • Measure and assess performance: Analyze your financial and operational results on a monthly, quarterly, and year-to-date basis, reforecasting and modifying your strategic plan as warranted


#4 — Establish Ownership and Gain Buy-In

Developing an accurate, viable budget requires buy-in from a range of stakeholders. However, that’s often limited by insufficient communication of goals, a lack of transparency, and little input from deans and school and department leaders. Ultimately, this may lead to inaccuracies, poorly understood reporting variances, and an overall distaste for budgeting. Here’s how to get your whole team on board and invested in success:

  • Share information on a regular cadence
  • Assign team members as budget advocates for each department
  • Leverage a collaborative planning approach and request inputs where needed
  • Utilize driver-based planning, tying together related items where dependencies make sense, to increase both buy-in and efficiency
  • Train new employees and end-users on key systems, especially when systems and processes change
  • Implement comprehensive variance reporting and require explanation inputs to enhance understanding of what drives variances and their impacts


#5 — Identify and Track Financial Commitments

A lack of transparency around commitment planning can create significant challenges in current and future budget cycles. Standardizing a process to collect, evaluate, and track funding agreements can enable your institution to better understand how resources will be used, track spending against budget, and ensure commitments align with strategic plans and initiatives. Use the following strategies to create a more effective commitment planning process:

  • Create a multi-year view of financial commitments to accurately see how they impact current and future budgets
  • Automate the collection, evaluation, and tracking of large funding agreements that are made throughout the institution
  • Align commitment spending with the general ledger to track spending against budget

By leveraging the appropriate financial and operational data, processes, and tools, deans and school leaders can improve planning efficiency and accuracy, empower strategic decision-making, and reduce the budget cycle to allow time to focus on other priorities.

Axiom™ Budgeting and Forecasting incorporates best-practice budget methodologies to support efficient, accurate, and transparent budget development. Equipped with this solution, college and university leaders can streamline the budgeting process and collaborate across departments and functions. To see how Axiom Budgeting and Forecasting could work for your institution, request a demo.

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