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Investigators and their research staff work within the hub of financial and compliance activities at their institution. Successful research professionals are not just good stewards of their grant funds. Like small-business owners, they must control and manage the financial operations for the budgeting, contracting, collection, and direction of these funds. Although many financial professionals are involved in the financial processes, investigators must direct the course and look out for the financial health of their own research enterprise.

This chapter starts with an explanation of financial processes and terminology related to the research enterprise. The remainder of the chapter follows the research revenue cycle, the financial course for studies, from start-up to close-out. This chapter will help you gain an appreciation of how multiple studies within an investigator’s portfolio are part of a department or section within the overall institution. Financial disclosure and conflict of interest are presented as examples of the compliance connection for research finance.

An investigator’s overall portfolio of studies should be self-sufficient. High-quality research is expensive, and all parties involved—investigators, sponsors, and institutions—need to understand this. Even if a particular area of study is worthy, “No margin…no mission” continues to apply.


An academic medical center is a complex environment. Research professionals, for example, need to work with their institution to make sure that research-related charges flow into the grant account and not to the patient’s bill. The better these professionals understand how the system works, the more likely they will be to proactively and correctly identify and assign research charges.

There can be variation in the business perspective of investigators, and processes may be decentralized or consolidated. Many investigators at academic medical centers are focused on translational research, clinical trials in which scientific results in the laboratory are applied in the clinical setting. Investigators doing translational research may be working collaboratively within the institution and a national network of colleagues. Many investigators are focused on securing federal awards to fund their research. Some investigators develop relationships with the pharmaceutical or medical device industry. From a business perspective, it may be good for research investigators to pursue developing a revenue stream from multiple potential sources.


The institution’s infrastructure is typically designed to support the business activities, especially the financial operations, of the institution. The “business” of academic medical centers consists primarily of medical services, medical education, and research. The challenge with the financial aspects of research is that protocols and sponsor contracts are not standardized in the same way as medical services and billing are. For example, institutions providing medical services typically contract with insurance providers or follow federal regulations that, despite being complicated and lengthy, are well defined.

The concepts for research finance become less mysterious when the investigator realizes they roughly ...

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