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February 21, 2024
Economically speaking, 2024 is presenting a complex mix of challenges and opportunities. However, what is happening within the legal industry? Reports from The American Lawyer and Reuters suggest that legal is inevitably taking a cautious view of this global uncertainty. However, there is growing demand in bankruptcy and litigation, and excitement around the potential of generative AI as highlighted by Bloomberg Law.
Budgets and financial planning for library and information services are more important than ever. They must be both flexible and strategic, aligning closely with the evolving needs and priorities of law firms to support growth and innovation in a dynamic environment. The end of March is fast approaching, and for many organisations, this is also the end of the financial year.
Are you ready to present an innovative and impactful budget?
Impress the management team with your financial knowledge
Few library and information professionals come from a business background. Trying to reconcile your library’s goals and users’ expectations with the reality of your financial constraints can be challenging. Financial management is pivotal in aligning library goals with the broader organisational strategy amidst financial constraints. This necessitates a blend of financial analysis, budget reporting, forecasting, organisational skills, and goal-setting.
Financial analysis: At the heart of budget management lies financial analysis, a critical skill that involves dissecting financial statements to devise and refine budget plans. This analytical approach helps you understand how you can make the most of your financial resources, enabling strategic decisions on staffing, investments, and ongoing acquisitions.
Budget reporting and forecasting: These are indispensable skills. Reports and forecasts provide insights into future financial scenarios, guiding the library's financial decision-making process. Effective forecasting, based on historical data and analytical projections, is crucial for the strategic allocation of funds and resource management, enabling libraries to ensure they provide value for money.
Organisational skills and goal-setting: How do you know that previous investment has provided this value? You should be able to explain and justify every single expense and tie it into the goal setting of the previous year. Did you achieve these goals and were your projects successful? Organisational prowess is key to effective budget management - you should be able to maintain a balanced budget while supporting your firm's operations and strategic initiatives.
Every step of a budget requires communication
Financial analysis, budget reporting, forecasting, organisational skills, and goal-setting are nothing without effective communication. Financial planning is not only about wrestling with spreadsheets but also about communicating your ideas with key stakeholders. Despite the article's age, this extract from T Kennedy’s Budgeting Basics for Small Libraries (2003) outlines some useful thoughts in preparing, finalising, presenting and monitoring a budget:
- Determine what the library hopes to accomplish during the next year
- Make choices and do your research: prioritize programs, review subscriptions and identify anticipated costs
- Draft a preliminary budget and ask for input from staff and colleagues
- Finalize the budget and present it to colleagues and stakeholders
- Once approved, implement the budget.
- Monitor and evaluate the budget throughout the year
Management relies on the budget to make the most effective use of the resources that are available. It is a planning tool for them and should also be a tool for the library manager. It outlines the library's financial limitations and indicates what staff anticipate accomplishing during the proposed time frame.
Without a budget, control of the library's finances will be left to managers who may not know anything about what the library does, its priorities and mission. With a generous financial controller this may not be a problem, but staff and the organisation may change and what was once an easy situation may suddenly become quite restrictive. It is most important for librarians to maintain as much control as they can over their resources”.
If a budget has been assigned to you and approved it is less likely that your ability to spend will be restricted as the year progresses. It also gives you the opportunity to demonstrate your management skills and financial sense. This should hopefully lead your manager to trust you to make decisions in the future.
This whole excerpt is relevant because it highlights the importance and necessity of getting involved with budget setting. It is clear from the steps above that the resulting document is not just numbers on a page, it’s about what you have gained from the whole process. From shared accomplishments to the building of trust amongst your managers.
The goal? Information service excellence
The conclusion is clear: communicating clear financial management is integral to the work of the library and information professional. More than ever, we are leveraging financial analysis, budget auditing, effective communication, and forecasting to ensure information services not only meet current user expectations but also secure their future.
By adopting a strategic approach to budgeting, librarians can be confident that their services remain vital resources within their firms, capable of adapting to changing needs and continuing to serve their organisations effectively. In doing so, they not only demonstrate their value beyond information provision but also contribute significantly to their firm's success.
What exciting new plans do you have for 2024, and beyond??
