A guide to preparing your budgets for next year.
Budgets are all about preparing for the expected and the unexpected as realistically as possible in the fastest time possible. You need to create a budget that is based on past performance and future projections.
The best results will come from a good mix of strategic and tactical planning that will in turn give you greater confidence in your decision making.
Once you’ve been using Calxa for a year or more, your budgeting options open up beyond what you could do in the first year. There’s more than one way to prepare next year’s budget so it’s important to think about which will work best for you.
Getting Started
Calxa’s Budget Factory is a flexible tool that is the quickest way to create new budgets or copy existing budgets across budget versions. You simply create a budget based on the current year actuals or budget and project forward to the following year or beyond. This also applies if you have multiple business units, programs, jobs or tracking categories.
You can get a first draft done in seconds.
Exporting and Importing
If you have complex calculations then you might want to use the Export and Import functions. This can also help you to delegate portions of the budget to department heads or those who may not have access to Calxa.
Involve the Right People
Calxa has the capability for you to add extra users – which means you don’t have to do it all! Just add and give permission to the department managers so they can edit their own budgets. Simply add what you need and then remove them later if you don’t want to give permanent access.
Getting the Balance Sheet Balance Right
It is important, especially for cashflow forecasting, that when you have completed the Profit and Loss Budget, you look at the Balance Sheet budget. Most of the calculations such as Super, GST and debtors/creditors are handled automatically by Calxa but you might need to add loan repayments and new projected asset purchases, for example. The Loan Wizard will work its magic by doing all complex calculations and will automatically update your budgets.
Get the Balance Sheet right for reliable monthly cashflow.
Final Approval
Once you have the go ahead from your CEO or the Board that the budget is complete, then lock the budget version for the year so it is in read only mode.
Copy and Edit Current Forecast
You now have reached the last stage of preparing your budget. Over the next 12 months things will no doubt change so make sure you copy the Approved Budget into the Current Forecast (use the Budget Factory for this) and remember not to lock it. You can review and edit this budget periodically throughout the year and use it as the basis of your cashflow forecasts.
For more information watch last year’s recording.