Language:


Introduction to the Revised Budget Register

Once you have finalised your Budgets for a particular financial year, it is generally recommended that you do not change them. Changing a Budget will mean that the original planning objectives will be lost. You will no longer be able to compare performance to budget as the year progresses, and so the divergence from the original plan may increase. Changing a Budget will also prevent a realistic evaluation of the quality of the budgeting process.

However, it may be that some factors used when calculating the Budgets (e.g. market conditions, rates of production etc) change. These changes may mean that it will be misleading to compare actual results with the original budgeted figures. For example, if there is a shortfall in sales, you may then need to re-evaluate some spending budgets to compensate for the reduced funding. Comparing the actual spending figures with the original Budgets will become less useful.

In this situation, you will benefit from having some flexibility in your budgeting system. You can use the Revised Budget register adjust Budgets as necessary, allowing you to evaluate current operations more effectively in the light of changing circumstances.

You can adjust a Revised Budget at any time, while leaving Budgets unchanged to document your original expectations.

To work with the Revised Budget register, follow these steps:

  1. To open the Revised Budget register, ensure you are in the Nominal Ledger and click the [Revised Budgets] button in the Master Control panel. The 'Revised Budget - Accounts: Browse' window is opened.

  2. To view the details in a Revised Budget record or to modify it, double-click it in the list. The record is opened in a new window with the title 'Revised Budget - Account: Inspect', ready for modification. Alternatively, click [New] to enter a new record.

    The Revised Budget window is very similar to the Budget window described here: please refer to that page for details of each field. You can enter new Revised Budget records as described on that page, using completely new information.

    You can also create a Revised Budget record by effectively copying and making adjustments to an existing Budget record. To do this, enter the same Account, Object, Period and sub-period Dates that you have used in a Budget record, and then use the % Budget and/or Values fields to make the adjustments. The existing Budget record does not have to be approved.

    The % Budget field allows you to make a percentage adjustment to the every figure in the Budget record for the same Account/Object/Period combination. Entering "10" to this field, for example, will add 10% to the Budget figures, while entering "-10" will subtract 10%. Entering "0" will mean there is to be no adjustment. After entering a % Budget, select 'Recalculate' from the Operations menu. The percentage adjustment will be applied to the figures in the Budget record, and the results will be placed in the Budget column in the grid and in the Budget Sum field at the bottom of the window. The Budget Sum field at the bottom of the window will also be updated.

    The Values field in the grid allows you to add or subtract fixed amounts from individual sub-period figures in the corresponding Budget record. Entering "10" in the Values field in a particular row, for example, will add 10 to the figure from the corresponding Budget row, while entering "-10" will subtract 10. After entering Value figures, enter 0 in the % Budget field and select 'Recalculate' from the Operations menu. The fixed amounts will be added to or subtracted from the figures in the Budget record, and the results will be placed in the Budget column in the grid. The Budget Sum field at the bottom of the window will also be updated. If you enter both a % Budget and a Value, the percentage will first be applied to the Budget figure and then the Value will be added.

    If the Dates in the grid do not match those in the Budget record, the 'Recalculate' function will take this into account and unexpected results may be obtained.

    Once you have entered a Revised Budget for each Account/Object combination, you should set an overall Revised Budget for each Account (i.e. the sum of the separate Revised Budgets for each Object). This overall Revised Budget record will be used when you produce a Balance Sheet or Profit & Loss without specifying an Object. You can do using the 'Calculate Sum from Account-Object Budget' function on the Operations menu in the same way as described for Budgets.

  1. Click [Save] to save any changes you have made or [Cancel] to revert to saved (or to discard the record if you were entering a new one). Close the window using the close box.

    !

    For Revised Budget figures to appear in Nominal Ledger reports for comparison purposes, you must make at least one entry with a date in the grid area of the Revised Budget screen.


  2. Once you have entered one Revised Budget record, you should enter Revised Budget records for every Account/Object combination that has a Budget, even those for which no revision is needed. This will ensure that the reports that compare Revised Budgets with actual figures will be complete.

  3. Three reports allow you to compare Revised Budgets with actual figures: the Balance Sheet, the Object/Quantity report (which provides this analysis separately for each Object/Account combination) and the Profit & Loss report.

  4. You can set the budget amounts to zero in every Revised Budget record using the 'Revised Budget' Maintenance function.