Remember that it is important that your honor society maintain a sound financial status and, ideally, that your assets grow each year. Remind the board that while a great deal of effort is justified in controlling expenses, (the art of saying no nicely and often) equal time is important for enhancing revenue. Developing a fundraising committee can be especially helpful in enhancing revenues and can balance the tendency to control expenses.
A review of past budgets is especially helpful and forms the basis for sound projections for the year ahead.
- Cost Increases
Generally, current year costs will be greater than the previous year for the same column in a classification. You will need to estimate the current cost, the anticipated price increases, and usage.
- Plan for the Unexpected
Circumstances which may increase expenses include additional expenditures, budgeted expenses may overrun the budgeted amount, or revenues may fall short of projections.
- Discretionary Expenses
An important budget goal is to end the year with an excess of revenue over expenses, which is described as a positive budget variance. When preparing your budget, include a "discretionary" expense (disbursement) as a safeguard for the unexpected.
Requests for Expenditures
When expenses come up that have not been budgeted, tell members they can place their request on the next board agenda. Some honor societies set a certain limit and budget a certain amount to accommodate a few such requests each year. Limits for unbudgeted expense are usually set at US$100 or less. If unbudgeted requests are emergencies, a mail or voice vote of the executive committee of the board can be taken.
When revenues are less and/or expenses are higher than expected, at levels that cause you concern, it is important to alert the president immediately. When budgetary problems arise, the issues should be taken to the full board as soon as possible.
Policy and Procedure Development
Your input and ideas for improvements and/or new financial management policies and procedures are important to the growth and function of your honor society. Share any ideas you have with the board. Most innovations in management come from honor society officers and other members who have a particular interest in their honor society's development.