Page 54 - DLIS104_MANAGEMENT OF LIBRARIES AND INFORMATION CENTRES

Reena Kapoor, Lovely Professional University Unit 8: Library Finance

Unit 8: Library Finance Notes

CONTENTS
Objectives
Introduction
8.1 Sources of Finance
8.2 Budgeting Procedure and Accounts
8.3 Cost Effectiveness Analysis
8.4 Cost Benefit Analysis
8.5 Summary
8.6 Keywords
8.7 Review Questions
8.8 Further Readings

Objectives
After studying this unit, you will be able to:
Understand the sources of library finance
Know the budgeting procedure and accounts
Discuss the cost effectiveness and cost beneficial analysis.

Introduction

During the last twenty years there was a growing trend to align library and information service
management to business models of management. In the late 1970s business conditions were
rapidly evolving in response to changes in economic thinking. Monetarism and its political children
Reaganomics (in the U.S.) and Thatcherism (in the UK) reinvigorated the debates about taxation,
investment, and public spending. Market forces, the role of markets, and competition were given
new prominence and interpretations. The roles of the consumer and customer in society and in
commerce were highlighted. Efficiency, the elimination of waste, and quality delivery were new
watchwords. The role of central government, economic intervention, and balances between public
and private sector activities were analyzed, criticized, and redefined.

Notes In short, the deregulation of economic activity was to be the favored means of ensuring
growth and wealth creation. This cycle of change would inevitably come to affect
every sector of economic activity including library and information services.

8.1 Sources of Finance
Sourcing money may be done for a variety of reasons. Traditional areas of need may be for capital
asset acquirement new machinery or the construction of a new building or depot. The development
of new products can be enormously costly and here again capital may be required. Normally, such
developments are financed internally, whereas capital for the acquisition of machinery may come
from external sources. In this day and age of tight liquidity, many organisations have to look for
short term capital in the way of overdraft or loans in order to provide a cash flow cushion.

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