EICM 9E Domain D

Question 1

Managing event funding & resources

Answer 1

Managing revenue sources including sponsorships, registration, grants, exhibit sales, & merchandise sales

Question 2

Managing the budget

Answer 2

Developing the budget, establishing pricing, and monitoring and revising the budget

Question 3

Managing monetary transactions

Answer 3

Establishing and monitoring internal controls and cash handling procedures

Question 4

Sponsorships

Answer 4

Major funding source for events
Contributes to the financial bottom line
Helps with cash flow
Effectively maintaining relationships with suppliers/partners

Question 5

Sponsor prospectus

Answer 5

Contains information to assist the prospective sponsor in making a decision. Includes:
Overview/history of event
ROI measures and opportunities
Description of the value of sponsorship
Letter of proposal
Audience demographics
Sponsorship benefits
Terms & conditions
Draft programme of the event content

Question 6

Title or Main Sponsor

Answer 6

Sponsor will underwrite the majority of the event and its name will be associated with the name of the event

Question 7

Tier model of Sponsorship

Answer 7

A most traditional sponsorship model; bronze, silver, gold levels with pre-determined benefits for each.

Question 8

Credit model of Sponsorship

Answer 8

A hybrid between a customized model and a tiered model with pre-set benefits. Sponsors and partners can choose from a list of benefits that are assigned credit values. This model can be easier and faster to administer

Question 9

In-kind Sponsors

Answer 9

Provides goods or services at no cost to the event. Can be very valuable in reducing overall costs

Question 10

Subvention

Answer 10

Common industry practice in international meetings market. It is used where competition is high to attract large congresses or events. It is financial support provided by the host destination or government as an incentive to event organizers.

Question 11

Application Service Provider (ASP)

Answer 11

Online registration companies that offer customizable registration forms, secure sites, credit card transaction processing and automated confirmations.

Question 12

Hosted Buyer Program

Answer 12

Offers complimentary travel, accommodations, and registration for pre-qualified buyers to attend and exhibit.

Question 13

Budget

Answer 13

Key piece of event planning information. An estimate of anticipated income and expenses for the event and provides financial control and accountability.

Question 14

Fixed Costs

Answer 14

Costs which are incurred regardless of the number of attendees at your event. I.e. meeting room rental, marketing, insurance, signage, AV & overhead

Question 15

Variable Costs

Answer 15

Costs that vary according to the number of attendees such as F&B, and printed material

Question 16

Indirect Costs

Answer 16

Organizational expenses not directly related to the event, such as salaries, wages, overhead & equipment repair.

Question 17

Incremental Budgeting

Answer 17

Review past history, preferably the last 3 years, and compare projected and actual figures from previous budgets. Review the post event report. Determine whether there have been any changes to the event goals & objectives. Update the revenue and expense items with current fees & costs. Be aware of any factors that could significantly impact attendance or costs.

Question 18

Zero-based Budgeting

Answer 18

If the event has never been held before, there is no financial history and the budget is created using estimates of anticipated income and expenses. This practice can be helpful for events with historical budgets to avoid automatically adding expenses that may no longer align with the event’s goals & objectives.

Question 19

Zero-based Budgeting Best Practices

Answer 19

Conduct careful research regarding the economic and business environment, potential competitors, target market and pricing.
Review budgets from similar events.

Question 20

7 Common Mistakes of Budget Planning

Answer 20

Allow contingencies for the unexpected
Include tax and service charges
Include labor costs
Communicate clear policies to speakers & staff
Review master account daily
Rely on history for meal guarantees
Know the value of your business

Question 21

Buy Forward

Answer 21

Method of hedging currency risk. This establishes a fixed exchange rate to accurately budget all fixed and variable costs in the home currency. This is a contract to exchange a certain amount of money on a specified date at a specified exchange rate.

Question 22

Value Added Tax

Answer 22

This is a point of sale tax that is levied by various countries at different rates for different commodities.

Question 23

Calculate number of attendees required to break even

Answer 23

Subtract variable costs from registration fee to get the contribution margin. Next divide total fixed costs (FC) by contribution margin (CM)
Reg fee = 500
VC = 300/person
FC = 10,000
Contribution Margin: 500 - 300 = 200
FC/CM: 10000/200 = 50
Event will break even with 50 attendees

Question 24

Calculate break even registration fee

Answer 24

Divide fixed costs (FC) by number of attendees then add VC
FC = 10,000
Estimated Attendees = 100
VC = 200/person
Break Even Reg fee: 10,000/100 + 200 = 300

Question 25

Specified profit registration

Answer 25

To calculate; Add specified profit to FC then divide by estimated attendance. Then add VC.
Specified profit = 20,000
FC = 10,000
Estimated attendance = 100
VC = 200/person
Reg fee: (20,000+10,000)/100 + 200 = 500

Question 26

Cash Accounting

Answer 26

Counts income and expenses as they are actually received and paid. This method does not recognize promises to pay (AP) or expectations of revenue (AR). Income and expenses are recorded at the time of each transaction.

Question 27

Accrual Accounting

Answer 27

Counts income and expenses as they are earned and incurred. This method records items as they relate to net worth when they are incurred, regardless of the ebb and flow of an organization’s finances.

Question 28

Income Statement (profit and loss statement)

Answer 28

Statement of revenues and expenses over a period of time

Question 29

Balance Sheet

Answer 29

Indicates overall financial status by subtracting expenses from income. This sheet provides the bottom line; total amount of assets, liabilities, and net worth at a particular point in time.

Question 30

Cash Flow Statement

Answer 30

This statement does not include the amount of future incoming and outgoing cash that has been recorded on credit. This is determined through 3 methods which cash enters and leaves; core operations, investing, financing.

Question 31

Chart of Accounts

Answer 31

A detailed list of the individual line items that make up the revenue and expense categories in a budget.

Question 32

Billing Timetable

Answer 32

Illustrates the budget lifecycle of an event, from its inception to the final payment of the master account and helps monitor cash flow.