Understanding Finance


How Universities Work

Universities are complex and unique organisations. They teach students of all ages, in almost every subject you can think of, on green campuses, in bustling cities, and at a distance, to learners in their own homes. They expand human knowledge by undertaking research in a mind-boggling range of areas. They are key anchors in their local communities, and regional hubs of economic activity. They are major employers, magnets for national and international collaboration, and an important pillar of civil society. No other kind of organisation comes close to the variety and scale of universities’ educational, entrepreneurial, charitable, and social activity.

Having a unique place in the world requires an unusual business model, that facilitates a wide range of operations. It also requires a unique way of accounting for how universities generate and spend their income and create value for all their stakeholders. It is a topic that is little- or often mis-understood beyond the walls of university committee meeting rooms. These pages contain a range of resources that explain how universities operate and create value, and how their finance teams account for it all. If you have any feedback or comments, please get in touch with Matt


A guide to Understanding University Finance


Over the years BUFDG has worked to improve understanding of university business models and financial accounting. In 2019 we launched an accessible new guide, Understanding University Finance, to be a useful companion for the broad church of university stakeholders and brave Annual Report explorers. In its first year, the guide has been downloaded over 5,000 times. 

The guide builds on the 2011 publication An Insider’s Guide to Finance and Accounting in Higher Education that was published jointly by number of sector bodies including BUFDG. It will be updated in January 2021 to reflect, among other things, updates to the terminology used in the 2020 financial statements.

Download the Understanding University Finance guide


Understanding Tax and Pensions in HE

We’re also pleased to share that a separate guide to Accounting for Pensions in Higher Education Institutions is in the drafting room and is scheduled for publication in late 2020. This will be joined by a revised edition of the BUFDG Briefing on Tax in Higher Education in the Spring 2021.



This site uses cookies and other tracking technologies to assist with navigation and your ability to provide feedback, analyse your use of the site and services and assist with our member communication efforts. Privacy Policy. Accept cookies Cookie Settings