Many university presidents are fearful that a budget can be too constricting, and the current economy could play a role in the downfall of their institution. However, a university budget is put in place to help the institution, not hurt it. A university budget isn't set in stone, it's a guide that will enable the institution to plan for the future and establish realistic objectives. It is not a fixed document never to be revisited. This is where many smart leaders get tripped up. To avoid wasting time on an ineffective and unhelpful budget, we've put together a few ways universities can get the most out of their financial plan.

Examine the budget every month
Every university has monthly expenses and one-time costs that a budget can account for. Month to-month, these expenses can change slightly, which is why it is important to evaluate the budget every few weeks. Changes don't need to be made, but reviewing the document regularly will enable leaders to make timely adjustments when necessary. With a strong budget, universities can take part in more accurate cash flow forecasting. 

Be patient
First-time budgeters at universities should understand there will be a learning curve when managing expenses. Each month, universities will have roughly the same amount of cash to work with, so they will have to adjust their expenses accordingly. Many universities have begun to use budgeting tools to help them get a better understanding of their finances and long-term projections. Just remember, using budgeting tools isn't cheating!

Adjust due to deviations
Even with all the data in the world, universities will likely find that their budget projections wind up off by small amounts here and there. That's OK. Budgets consist of educated guesses and sound planning; each line isn't guaranteed to come to fruition as it is originally designated. After a few months of operating under the budget, financial decision-makers at universities will get a better understanding of how it works, and financial planners can adjust the budget.

"You're going to miss your estimates," said Mark Weaver, associate professor of management at the University of Alabama. "That doesn't make you unintelligent or a bad businessperson. Instead, try to miss them intelligently and in ways you can correct." 

Exercise discipline
Universities will always have the opportunity to deviate from their budget, and it will be especially tempting in some situations. Keeping this in mind, financial decision-makers at a university should only operate outside their budget when the right opportunity arrives. According to Weaver, if there is a valuable investment opportunity financial decision-makers at universities should not be afraid to make the move.

Stay cautious
A university may experience record numbers of enrollment and investments, which may cause financial decision-makers at a university to make some riskier plans for the future. While this may be appealing and can set a university apart from the rest, a budget helps decision-makers stay on top of their institution's finances.

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