The Official Blog of Forecast5 Analytics

Thomas Ridout
Thomas Ridout

Budget, Forecasting, 5Cast, Higher Education

No More Gotchas: Eliminating the Surprise Factor in Financial Planning

Posted on Jul 11, 2017 9:00:00 AM

Surprise! Unless it’s someone’s birthday, this word causes heartburn for even the most experienced member of an institution's finance team. It means one of the variables that affect the budget has reared its ugly head and yelled “gotcha.”

Even with a meticulously maintained general ledger, it’s easy for unexpected fluctuations in expenses, enrollment or funding to strike a blow to your financial plan.

To avoid the surprise factor in budget management, it’s time to boost your forecasting capabilities to be able to anticipate better what changes to key budget inputs can mean one, two…even five years out.

Read "Back to the Future:  Harnessing the Power of Historical Data to Better Manage Your Budget"

Data is everywhere

Most higher education institutions have treasure troves of data managed by multiple departments. Adjustments to that data can cause big surprises to the budget planning process.

  • Admissions may be anticipating an uptick in enrollment based on conversations with area high school guidance counselors.
  • The announced closing of a local plant may have an academic department thinking about adding a new program to train the newly laid off workers.
  • The maintenance team could be weighing a repair or replace decision for the A/C unit that keeps the gym cool.

Without direct access to that data, your budget planning process could be in for some big gotchas. Fortunately, there’s a smart way tap the data from multiple sources to enable better financial forecasting.

See into the future

The first step of effective forecasting requires a process change. You’ll want to engage stakeholders from throughout the institution to identify the key drivers for expenses and revenues that can affect your budget over the next few years.

Then, that data can be collected and input into an analytical software tool that enables you to quickly model different scenarios to accurately predict and manage your financial resources.

Save the surprises for celebrations

The time spent evaluating what data sets are critical to forecasting pays off very quickly. Stakeholders from all over the institution have ownership in the process and are focused on the same priorities.

By investing in an analytical software tool, you’re able to provide a simple view of how requests for funds or changes in revenue affect the big picture. Administrators from all departments get a better understanding of how their needs affect the institution’s overall financial health.

Instead of dreading where the next surprise might pop up, you’ll be equipped to eliminate gotchas before they get you.

Break the cycle of having to make the budget fit in the short term with this guide.


Thomas M. Ridout is a Senior Analytics Advisor for the community college market with Forecast5 Analytics. He is the former Executive Director of Finance for Northeast Iowa Community College (NICC) in Calmar, Iowa. Thomas was employed with NICC for 41 years, also serving as an Accountant and Business Manager. Prior to NICC, he was employed with Dee Gosling and Co. CPA’s in Waukon, Iowa. He graduated from Northeast Iowa Community College with an Accounting degree. He is also a member of the Northeast Iowa Community College Alumni Hall of Fame.

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