Securing your science: the researcher’s guide to financial management

For Michael Monaghan, the road to better laboratory finances came with breaking down walls — literally. When faced with the costly challenge of securing microscope access, Monaghan, a biomedical engineer at Trinity College Dublin, had to get creative.

“The equipment was housed in an isolated quarter and its deconstruction and recalibration would be too costly,” he says. “In the end, we got approval to break down the wall of the microscope room, allowing us to reconfigure the building’s boundaries. By thinking outside the box, we killed two birds with one stone — we got the microscope, and the total cost was only 10% of the predicted relocation fee.”

Lab financial management has perhaps never been more important. The COVID-19 pandemic paired with a slowing world economy have led to budgets being cut globally. During this year alone, the South Korean government has announced a 14.7% reduction in research expenditure, US science agencies are predicted to miss research-spending goals by as much as US$7 billion and the European Union’s flagship science programme, Horizon Europe, is set to lose €2.1 billion ($2.28 billion) of its €95.5-billion budget.

Alongside this, supply-chain disruptions and increasing energy prices are adding to the rising tide of research expenses. The price of scientific equipment has also been driven higher by inflation, while research grants have seen little increment.

Despite these circumstances, financial training for junior lab members is still scarce. “I wish I had received more formal training on how to financially manage a lab when I was a research trainee,” says Kaitlyn Sadtler, an immunoengineering researcher at the National Institutes of Health in Bethesda, Maryland. Nature spoke to researchers about their budget tips. Here’s their advice.

Build a culture of trust

Sadtler was exposed to two financial-management styles during her time as an early-career researcher. Her PhD lab had a culture of responsible spending, managed by her principal investigator, whereas in her postdoctoral lab, each member was allocated a fixed monthly budget to spend. When starting her own lab, Sadtler gravitated towards the first management style, while integrating extra checks and balances.

“At the start of each fiscal year I would gather my lab members to discuss our funds and ongoing projects,” she says. “I find that such a meeting creates a collective sense of ownership, which fosters a culture of responsible spending.”

However, to make sure that the trust she gives lab members is not exploited and there are funds for rainy days, Sadtler also maintains a carefully monitored spreadsheet containing the spending of each lab member so that the flow of funds is clear. She also slightly overestimates her lab’s spending, to have funds for emergencies or wish-list items. “By the start of the next fiscal year, my lab will calculate how much we have left and allocate the extra funds to our wish-list experiments,” she says. “An example would be single-cell RNA sequencing, which can cost upwards of $1,000 per sample. It was this experiment which helped us to kick start a new study in our lab last year.”

Negotiate discounts and buy in bulk

Negotiation is another important but overlooked skill for lab-budget management, according to Monaghan. His lab regularly orders cell-culture media in bulk, so he can often negotiate discounts of 20–50%. Buying in bulk also comes with other benefits: larger purchases are often prioritized for shipment, and delivery fees — which are calculated on how many items are ordered, not the total weight — are reduced. This process, Monaghan says, also builds a closer relationship with sales representatives, leading to improved technical support and product introduction.

There is also the shopping trend known as group buying, in which researchers place a shared order with the same company. This enables negotiation for better prices and improves the chances of priority shipping. However, Monaghan warns that “bureaucratic policies in institutions can add time to [this process], possibly negating the savings benefits”.

What steps to take when funding starts to run out

The geographical location of a lab also plays a part in spending decisions, says Jeremy Teo, an assistant professor at New York University Abu Dhabi in the United Arab Emirates. “In Abu Dhabi, shipping of chemical and biological materials can take up to three times longer than in the United States, and items might also be transported in non-optimal conditions. Therefore, if the items can be preserved, we try to spend as early as we can to prevent delays.” Teo adds that his lab tends to purchase items in bulk during the winter season, when the weather is cooler, because the extreme heat of the Abu Dhabi summer can damage biological materials en route.

Make it a team effort

Because the day-to-day responsibilities of an investigator can be overwhelming, lab members and institutional staff should be on hand to offer help. “Managing finances is a team effort and bringing experienced staff on board can be useful,” says Sadtler. “One of my technicians is supporting me with lab finances and, because she already has experience handling budgets, she is able to recognize when items are more expensive than they should be and how to get bundle deals.”

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Institutions can provide another source of support and junior investigators should consider attending orientations regarding handling finances, reading handbooks and seeking advice from senior investigators. Sadtler also attends monthly meetings with administrative and budget-management staff at her institution to discuss lab expenditures, including spending projections and updates on expiring funds. “This has helped me to stay updated on how my lab is doing financially and to spend funds in a timely manner,” she says.

Teo says that, when he started his assistant professorship, he did not pay attention to e-mails or institutional policies on research spending and only later learnt that he was unable to carry funds forward to the next financial cycle. “Every mistake is a good lesson. I highly advise all new investigators to read e-mails from the finance office and create calendar reminders.”

Learn money management early

“Financial-management skills are not only important for principal investigators, but also for researchers interested in entering different industries,” says Gordon Xiong, assistant director at the Singapore Health Technologies Consortium. “For instance, project managers are often expected to organize timely deliverables and control budgetary spending for institutional and industry-sponsored projects. To prepare researchers for these positions, early exposure to financial and project management is key.”

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Like most scientists, Xiong learnt budgetary management on the job, while assisting his PhD supervisor with grant applications (see ‘Tips for lab budgeting’) . A postdoctoral stint gave him an opportunity to be a co-investigator on several projects and allowed him to hone his skills further. Today, he manages a programme that at one time was giving out seed funding to university researchers. “Most PhD graduates would have completed multi-year experimental projects, which means employers are confident in their technical and analytical skills. However, to build the financial skills that are also valued in the industry, it’s useful to get involved in managing project budgets early on,” he says.

Sadtler says that, although there is no formal financial-management training programme at her institution, she mentors her students during the grant-writing process. “Getting competing quotes from vendors for large value items and learning how much to budget for personnel prepares my students for future leadership responsibilities.”

Monaghan has supported his students during fellowship applications when they had to budget for expenditures such as salary, materials costs and travel expenses. “Although there are no formal training programmes, mentors can provide informal learning experiences for their students. When my postdocs apply for fellowships, I scrutinize their budget sections carefully, because grantors look for realistic budgeting skills in research trainees. Through this, a few of my postdocs have successfully received fellowships.”