writing assignment

Running Head: SPORT FINANCE AND BUDGET 1

SPORT FINANCE AND BUDGET 4

Sport Finance and Budget

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The Impact of Sports Finance and Budgeting in a Sports Organization

Good financial management is crucial in sports organizations. Financial management in sports organization refers to the various ways through which funds are accessed and managed. A financial director is mandated with the duty to account for finances through strategic budgeting, planning, accounting and risk management among other tasks. Budgets are common in all organizations. Budget contains of the various ways through which funds are allocated for spending. Usually, some components require stronger emphasis over others and it is important to allocate funds according to the relative importance of an expense. Budgets for sports organizations should prioritize the most essential expenditures so that there is enough money for athletic programs. Overspending where it is not necessary raises an ethical question regarding financial management in sports organizations.

When preparing budgets in sports organizations several factors must be taken into consideration: the source of funds whether it is from membership fees, fundraising or donations; what realistic expenses does the organization have, this can be derived from previous reports; the number of members and their individual needs that may affect the budget allocation, for example, how many players are in the team that will require new uniforms; what are the major expenses for the period for instance emergency money, accommodations, food, travel costs etc. (The Ohio University, n.d).

Budgets in sports organizations may either be longer term budgets or short term budgets. Short term budgets include short term expenditures such as food, drinks, uniforms, and insurance for arranged sports events (The Ohio University, n.d). Long term budgets include expenditures that have long lasting impacts on the organization such as training expenditures, expenditures to purchase vehicles and other organization’s equipment. Long term budgets are prepared when planning for long term organizational investments.

In sports organizations, when done correctly, budgeting significantly impact the performance of the organization. A good budget serves as the planning tool for the entire organization and helps align resources with objectives and goals. Budgets also serve to control activities through regulating how funds are used (Connee Zotos, 2008). In certain situations, budgets may fail to serve the above roles. For instance, when budgeting process only includes a few stakeholders, reactive budgeting, overspending, and financial allocation conflicts will follow. Secondly, when a constant annual percentage increase in budget allocation is implemented, some projects become overfunded and others are underfunded (Connee Zotos, 2008). It is important to note that variables such as team transportation costs, recruiting costs, professional development costs, and equipment and facility costs (Connee Zotos, 2008). Adopting a constant yearly increment percentage will allocate some projects excess money while others are allocated insufficient funds.

In conclusion, sports finance is managed through the use of well documented and reviewed budgets. The budget making process should be collaborative and detailed involving all the relevant stakeholder. When well prepared, budgets in sports organizations serve as planning tools and helps allocate resources to facilitate accomplishment of important goals and objectives. Budgets help reflect on the past, plan for the present and make projections for the future.

REFERENCES

Connee Zotos, P. (2008). The Budgeting Process: Three ... Retrieved from Sports Manageemnt Resources: https://www.sportsmanagementresources.com/blog/budgeting-process-three-common-mistakes

Mathieu Winand, T. Z. (2010). A Financial Management Tool for Sport Federations. School of Sport, University of Stirling, 1-26.

The Ohio University. (n.d). Finance Administration of Sports: Budgeting, Forecasting, and Planning. Retrieved from The Ohio University: https://onlinemasters.ohio.edu/blog/finance-administration-of-sports-budgeting-forecasting-and-planning/