This blog article covers the financial budgets feature within Sage 200 Evolution.
Financial planning plays a vital role within an organisation. Knowing the status of the finances of an organisation and how these finances are being used is paramount. Based on this premise, financial budgets can be successfully implemented as a monitoring tool to compare the actual finances of an organisation to predefined budgetary values.
Sage 200 Evolution has a detailed financial budget feature which allows for budget values to be added for individual GL accounts per period within a financial year. Forecast values can also be added per GL account per period which caters for a further dimension of functionality.
The ‘Budget Dashboard’ allows for the viewing of an assortment of budget variances which include the following:
- Variance % Actual/Budget
- Variance % Actual/Forecast
A further tier that can be used within the Sage 200 Evolution budgets feature is project budgets. Within Sage 200 Evolution projects can be created and transactions can in turn be linked to projects. A master project sub project structure can also be implemented. Budget values can then be linked to a GL account for a project which allows for analysis of budget information (Actual, forecast) per project. An example of this process is as follows:
A construction company is building a housing complex consisting of four individual units. The housing complex is created as a main project and the four units are setup as sub projects. Budget information is created for the GL account ‘Building Materials’. The budget values are setup for the four sub projects (the four units) within the ‘Building Materials’ account which in turn allows for detailed information to be analysed for each unit. The actual costs, forecast values, variances etc. can easily be established for each individual unit (sub project).
The financial reports within Sage 200 Evolution incorporate the budgets feature. Filter options within these reports allow for the inclusion of budget values which is very useful for analysis purposes. The Visual Reports feature within the GL module can also be viewed with budget information.
Two additional GL reports that incorporate budget information are the ‘Revised Budget History’ & the ‘Project Budget vs Actual’ report. Let’s look at the unique features of these reports. Firstly the ‘Revised Budget History’ report displays details of any changes made to current budget values. The report indicates the period of the budget that was changed, details of the original budget, details of the new budget, reason for the change to the budget value, date when the change was made and the agent that changed the budget value. This report can therefore provide comprehensive information about any changes that were made to budget information.
The ‘Project Budget vs Actual’ report is a widely viewed report as all relevant information about projects and their budget values can be analysed. Information included on the report are project budget, project actual and variances.
Over and Under Budget
The terms ‘over budget’ and ‘under budget’ are often mentioned when discussing or analysing financial information. It is however important to classify the terms within the appropriate context. We can firstly consider the term ‘over budget’ within the confines of a practical example as follows:
Over Budget Scenario One
The budget for an expense account such as ‘Printing and Stationery’. If the organization is over budget on this account it means that more has been spent on ‘Printing and Stationery’ that was anticipated when the budget was generated. This situation could be considered as being unfavourable.
Over Budget Scenario Two
The budget for an income account such as ‘Sales’. If the organization is over budget on this account it means that more funds have been received in the form of sales than was anticipated when the budget was generated. This situation could be considered as being very favourable.
Under Budget Scenario One
The budget for an expense account such as ‘Repairs and Maintenance’. If the organization is under budget on this account it means that less has been spent on ‘Repairs and Maintenance’ that was anticipated when the budget was generated. This situation could be considered as being favourable.
Under Budget Scenario Two
The budget for an income account such as ‘Consumable Sales’. If the organization is under budget on this account it means that less funds have been received in the form of consumable sales than was anticipated when the budget was generated. This situation could be considered as being unfavourable.
Therefore it is vital to consider all the pertinent information when comparing budget values and actual values especially the type of GL account that is being analysed.
Importing of Budget Information
Budget information can be imported into a Sage 200 Evolution database by using the Data Distribution Services feature. This feature allows for the importing of budget values directly from a CSV file. Please refer to the links below for details on the Sage 200 Data Distribution Services and the budgets feature within Sage 200 Evolution.
Please click here for a video presentation on the Sage 200 Evolution Data Distribution Services feature.
Please click here for a video presentation on the budgets feature within Sage 200 Evolution.
Please click here for a Sage 200 Evolution Knowledgebase article on how to import GL accounts.
In conclusion, budgets within an organization work in conjunction with financial planning. The budget features within Sage 200 Evolution provide an important platform for the implementation of financial budgeting within an organization.