Event Budgeting
imperialcollegeunion.org
Event Budgeting Page 1 imperialcollegeunion.org/training
Contents Contents
2
Introduction
3
Guide to Events Budgets
4
Profit/Loss
8
VAT
10
Š 2011 - Imperial College Union Version 2.0 - 01 June 2011
Event Budgeting Page 2 imperialcollegeunion.org/training
Introduction The Purpose of this Booklet This booklet is intended as a guide to constructing budgets for individual one off events; and the approval process for those budgets. To help you in the process of constructing an event budget there is a dedicated template available at imperialcollegeunion.org/forms.
Michael Foster Deputy President (Finance & Services) E: dpfs@imperial.ac.uk T: 020 7594 8060, extension: 58062
Questions or queries should be directed to the Deputy President (Finance & Services).
Event Budgeting Page 3 imperialcollegeunion.org/training
Guide to Event Budgets For any event your Club, Society or Project organises you are required to submit an event budget (showing a breakdown of your expected Income and Expenditure) to the Union. With total expenditure: • Less than £200 – Budget needs to be approved within your Club, Society or Project. • £ 200 -£1,000 – Budget also needs to be approved by your Management Group Treasurer. • More than £1,000 – Budget also needs to be approved by the Deputy President (Finance & Services).
from one year to the next therefore reducing workload for officers. Why submit a budget to the Union?
Expenditures must be approved, and so a budget shows how you will spend the money and how you will earn it back. In almost all cases of budget submissions, we are able to give advice e.g. with suppliers of goods, so that you can cut down your costs further and make more money for your Club, Society or Project to spend. A budget is required in order to approve expenditure for an event, when the funds are not currently available.
Completing your budget Submission Procedure Your budget must be submitted using the Union’s Event Budget Template which can be found online at imperialcollegeunion.org/forms.
Why use the Union’s budget template? The template automatically calculates the VAT and net amounts and breakeven numbers for you, and automatically changes when you change any of your income or expenditure amounts. So all in all it makes it much easier for you. We also know it is accurate and that it will give us all the information we need, and so it is quicker for us to approve your budget. It can also be used and edited Event Budgeting Page 4 imperialcollegeunion.org/training
The first field detailing your Club, Society or Project and event are simple to fill but must be done as the Union receives many budgets. The expected number field must be filled in order for the graph at the bottom to be displayed. The expected number is either last year’s numbers or 2/3 of the capacity of your venue (whichever is lower). Do not be over-enthusiastic with your numbers as otherwise you will make a loss. If your event runs over more than one day e.g. a play with three nights, then you will need to consider the total number expected over the three nights as your expected number and not that of each individual night.
Guide to Event Budgets cont... Fixed Expenditure This is expenditure that you have to make, regardless of how many people come to the event. For items such as programmes, you still need to order before you know the numbers who will be attending, so it is still considered as fixed expenditure. Fixed expenditures include venue hire, lighting, sound, ticket booklets, DJ and other entertainments, decorations, publicity materials, stewards, costumes, set/ staging, make-up, programmes. Replace “item 1” with the name of your item and put in the number of units. This is usually 1, though if you are buying multiple items, then input the numbers appropriately; refer to the table below. The VAT and Net amounts are automatically calculated. If the amount that you have been told by your supplier is excluding VAT, then change the tab to ex VAT. If not, then keep it to inc VAT. Continue for the other expenditures you have. Expenditure
Units
Price/Unit
Inc/Ex. Vat
VAT Rate
Gross
VAT
Net
1
£700.00
Ex
Std
£840.00
£140.00
£700.00
Fixed Expenditure Venue
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Variable Expenditure This is expenditure that depends on the number of attendees and is for items which you can order once you know how many tickets you have sold e.g. dinners, cost for entry. As before, replace “item 1” with your expenditure and for the quantity put the expected number of sales. This must be the same as your expected number at the top of the budget sheet. Once you have completed the budget you will be able to vary the numbers and see how this effects your profit or loss. Continue for your other variable expenditures. Expenditure
Units
Price/Unit
Units/ Attendee
Inc/Ex. Vat
VAT Rate
Gross
VAT
Net
250
£13.50
1
Ex
Std
£4,050.00
£675.00
£3,375.00
Variable Expenditure Dinner/Catering
Fixed Income This is income that you will definitely get as long as the event goes ahead, such as sponsorship, donations and contributions from your Self Generated Income (SGI). You are allowed to use funds in your SGI to contribute to an event’s costs. Fill this in the same manner as for Fixed Expenditure. Income
Units
Price/Unit Inc/Ex. Vat
VAT Rate
Gross
VAT
Net
1
£500.00
Std
£500.00
£83.33
£416.67
Fixed Income Sponsorship
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Inc
Variable Income This is income that could vary and the total is not known. This category usually is ticket sales. The income per ticket is known, but you do not know how many tickets will be sold and so you do not know the total you will get until the event. Other variable income could include sponsorship/donation obtained per ticket sold, number of programmes sold, number of t-shirts sold etc. Replace “item 1” with your item name. For ‘units’ put your expected number of sales for that item. If it is tickets sold, then it must be the expected number that is at the top of the budget page. Fill this in the same manner for Fixed Expenditure.
Income
Units
Price/Unit
Units/ Attendee
Inc/Ex. Vat
VAT Rate
Gross
VAT
Net
250
£20.00
1
Inc
Std
£5,000.00
£833.33
£4,166.67
Fixed Income Tickets
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Breakeven analysis Attendees
Income
Expenditure
Profit/(Loss)
150
£2,978.72
£3,095.43
(£116.70)
165
£3,234.04
£3,297.93
(£63.88)
180
£3,489.63
£3,500.43
(£11.06)
195
£3,744.68
£3,702.93
£41.76
210
£4,000.00
£3,905.43
£94.57
225
£4,255.32
£4,107.93
£147.39
240
£4,510.64
£4,310.43
£200.21
255
£4,765.96
£4,512.93
£253.03
270
£5,021.28
£4,715.43
£305.85
285
£5,276.60
£4,917.93
£358.67
300
£5,531.91
£5,120.43
£411.49
The Breakeven Number Array, shows the expected profit or loss your event will make depending on the number of attendees. If the number is in RED and in brackets then it means the event will make a loss if you only get those number of ticket sales (indicated on the left hand side). Your Breakeven Number is the one you are concerned with. This shows the number of ticket sales needed so that your expenditures and incomes balance. Any more sales than this will mean a profit for your Club, Society or Project. The graph on the next page shows the same information.
Event Budgeting Page 8 imperialcollegeunion.org/training
Breakeven analysis cont...
Important If your event makes a loss and your Club, Society or Project goes into debt, your group will have to pay it back and will be prevented from doing some activities until steps are made to pay back the debt - so do not make a loss with your event!
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VAT VAT is made very simple with the Budget Template as it is all done for you. There are a few things to remember. This spreadsheet assumes that your Gross group will be able to claim back all the VAT for your expenditure, and hence shows you the expenditure £840.00 excluding VAT (i.e. the amount you will ultimately pay). £24.00 Therefore you must ensure that you will be able to obtain a VAT receipt for these items, otherwise you cannot claim back the VAT and your Club, Society or Project account will be charged the full amount (i.e. the Gross amount)
VAT
Net
£140.00
£700.00
£4.00
£20.00
With some Expenditure you may not be able to claim back VAT e.g. if you are paying a student DJ to DJ at your party, they will not be VAT registered and hence you will not be able to get a VAT receipt and will be unable to claim any VAT back. In this case change the ‘VAT Rate’ to zero. Expenditure DJ
Units
Price/Unit
Inc/Ex. Vat
VAT Rate
Gross
VAT
Net
1
£50.00
Ex
Zero
£50.00
Zero
£50.00
Ensure you know whether the cost/income is excluding or including VAT and change the tab appropriately. Internal transfers do not incur VAT. Internal transfers mean transfers within the Union, see the Finance Operations training for more details. Examples of internal transfers are if you are paying another Union Club, Society or Project for a service. Though you are separate, we are one Union and so it is just a transfer of money from one group to the others. Expenditure Hire lights from DramSoc
Units
Price/Unit
Inc/Ex. Vat
VAT Rate
Gross
VAT
Net
1
£50.00
Ex
Zero
£50.00
Zero
£50.00
Some items are VAT zero-rated (i.e. the VAT rate is 0%, rather that 20%) which means you do pay VAT on them at 0% and you claim VAT at 0% These items include: printed matter e.g. programmes and brochures. See the Finance Operations booklet for more information on VAT and exemptions. Other items are VAT exempt, which means no VAT is charged and neither can we charge VAT. Event Budgeting Page 10 imperialcollegeunion.org/training
VAT cont... Expenditure Programmes
Units
Price/Unit
Inc/Ex. Vat
VAT Rate
Gross
VAT
Net
250
£1.00
Ex
Zero
£250.00
Zero
£250.00
Summary
• The Union Event Budget Template must be used to submit your budget. • Be realistic with your expected number of attendees. • Fixed Expenditure– any expenditure that is required for the event to go ahead, regardless of the number of tickets that you end up selling e.g. venue, DJ, stewards. • Variable Expenditure – expenditure that is dependant on the number of tickets you sell /number of attendees e.g. dinner cost per head. • Fixed Income - any income that is guaranteed if the event goes ahead, regardless of the number of tickets that you end up selling e.g. sponsorship. • Variable Income - income that is dependant on the number of tickets you sell/ number of attendees e.g. income from ticket sales. • The breakeven graph and array show the number of tickets you need to sell in order for your incomes and expenditures to balance. Red indicates the loss you will make and black indicates the profit. • Remember that you must not exceed your event budget and get your Club, Society or Project into debt.
Things to remember
• Get a VAT invoice for anything you want to claim VAT on. • You mustn’t overspend on your approved event budget. • The Union is here to help: we can give you advice based on our experience of similar events, names of recommended suppliers, advice on publicity and sponsorship, as well as services that we can provide. • Remember the financial regulations – you must NOT take large amounts of money home with you, we can provide safe storage. • You must NOT pay cash in hand – you must bank the money first and pay them after. • Any contracts to do with your event must be brought to Deputy President (Finance & Services) for signing.
Event Budgeting Page 11 imperialcollegeunion.org/training
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