For the nine months ended September 30, 2013, PRSA’s net financial results are tracking better than the 2013 budget for the same period and are poised to meet or exceed our annual goal of returning 1% of annual operating expenses back to the reserves.
PRSA’s operations run on a seasonal cycle that creates various points of surpluses and deficits throughout the fiscal year. Membership renewals are high in February; professional development and Sections programming are strong in the spring, Anvils awards and Leadership Rally take place in June; and the International Conference takes place in the fourth quarter. However, PRSA incurs certain fixed expenses evenly throughout the year. Depending upon the timing and revenue-generating nature of each program, a net surplus or deficit will be reflected. Although the seasonality of the programs has been changing over time, we prepare and budget for it. The nine months ended September 30 typically results in a seasonal deficit and we budgeted for this deficit in 2013. Activity picks up again in the fall and we anticipate that the deficit will be reversed by the end of October.
In addition to budgeting for seasonal revenue fluctuations, we have been able to control variable expenses in direct proportion to changes in budgeted revenue. For example, registration revenue for the various professional development seminars, including the Digital Impact Conference is trailing the budget due to lower than anticipated attendance. With strict expense management protocols in place, we were able to respond to this lower revenue by reducing budgeted expenses which ultimately yielded a better-than-budget net result.
Since the International Conference will take place at the end of October, the registration revenue will not be fully recognized until the Conference is presented. However, expenses are being incurred now in order to produce the Conference. Expenses are budgeted to run high in August/September while the revenue is deferred. The net effect creates a deficit in the months leading up to October when all Conference revenue is recognized.
All in all, PRSA takes great care to maintain fiscal control and responds appropriately to economic trends and unexpected change in circumstances. Budgeting, although not exact, is a science that we track and adjust as reasonably necessary. At the end of September 2013, PRSA is exceeding its net budget goals as well and we expect to give a minimum 1% of our annual operating expense to reserves in order to help ensure our fiscal viability for years to come.
I encourage all PRSA members to review our interim financial statements as of September 30, 2013 — which are available in PRSA’s Assembly Delegate e-Group — and to contact me with any questions or concerns that you may have.