Budget Management

Effective budget management enables financial planning, performance monitoring, and cost control. This guide covers comprehensive budgeting capabilities in Angage ERP.

Understanding Budgets

Budget Types

Operating Budget

Day-to-day operations:

• Revenue budgets
• Expense budgets
• Departmental budgets
• Project budgets

Capital Budget

Long-term investments:

• Asset purchases
• Infrastructure
• Technology projects
• Expansion plans

Cash Flow Budget

Liquidity planning:

• Receipt timing
• Payment scheduling
• Working capital
• Financing needs

Rolling Forecasts

Continuous planning:

• Updated quarterly
• Fixed horizon
• Flexible adjustments
• Trend-based

Budget Setup

Creating Budget Structure

1. Navigate to Finance → Budgets
2. Click New Budget
3. Define parameters:
   • Name: FY2024 Operating Budget
   • Type: Annual Budget
   • Period: Jan-Dec 2024
   • Status: Draft

Budget Dimensions

Configure tracking by:

• Account: GL accounts
• Cost Center: Departments
• Project: Specific initiatives
• Product: Product lines
• Geography: Regions/locations

How-To Guides

How to Create Annual Budgets

Top-Down Approach

1. Set company targets:

   • Revenue growth: 15%
   • Expense ratio: 65%
   • EBITDA margin: 20%

2. Allocate to departments:

   Total Revenue Target: $10M
   - Sales North: $4M (40%)
   - Sales South: $3M (30%)
   - Sales West: $3M (30%)

3. Department managers detail:

   • Break down by month
   • Assign to accounts
   • Justify assumptions

Bottom-Up Approach

1. Departments submit needs
2. Roll up to company level
3. Review and adjust
4. Iterate to balance
5. Finalize budget

How to Import Budget Data

Excel Import

1. Download template

2. Structure data:

   Account | Cost Center | Jan | Feb | Mar...
   4100    | SALES-01   | 100 | 110 | 120...
   5100    | ADMIN-01   | 50  | 50  | 55...

3. Validate data:

   • Account codes exist
   • Cost centers valid
   • Amounts reasonable
   • Total balanced

4. Import and review

5. Correct errors

6. Process import

Copy from Prior Year

1. Select source budget

2. Choose copy options:

   • Same amounts
   • Apply % increase
   • Use growth factors
   • Adjust by inflation

3. Review and modify

4. Save new budget

How to Implement Budget Controls

Approval Hierarchy

Set up approval levels:

< $1,000: Auto-approve
$1,000-$5,000: Manager
$5,000-$25,000: Director  
> $25,000: VP/CFO

Control Types

Soft Controls (Warning)

• Alert when 80% consumed
• Flag over-budget items
• Allow transaction
• Require justification

Hard Controls (Blocking)

• Prevent over-budget
• Require approval
• Force reallocation
• Stop at 100%

Real-Time Checking

Enable checking at:

• Purchase requisition
• Purchase order
• Expense report
• Journal entry
• Payment approval

How to Monitor Budget Performance

Budget vs Actual Reports

Run standard comparisons:

1. Summary View

   Department: Sales
   YTD Budget: $500,000
   YTD Actual: $480,000
   Variance: ($20,000) -4%

2. Detailed Analysis

   • By account
   • By period
   • By project
   • Drill to transactions

Variance Analysis

For each variance:

1. Identify Type

   • Volume variance
   • Price variance
   • Timing difference
   • One-time event

2. Document Cause

   • Market conditions
   • Operational changes
   • External factors
   • Internal decisions

3. Action Plan

   • Corrective measures
   • Budget revision
   • Process improvement
   • Future prevention

How to Revise Budgets

Budget Amendments

When changes needed:

1. Create amendment request

2. Document justification:

   • Business change
   • Market conditions
   • Strategic shift
   • Error correction

3. Reallocation options:

   • Move between accounts
   • Adjust periods
   • Change totals
   • Update assumptions

4. Approval process

5. Update systems

6. Communicate changes

Forecast Updates

Quarterly reforecasting:

1. Lock actual periods

2. Update future periods:

   • Actuals + Forecast
   • Trend analysis
   • Known changes
   • Risk adjustments

3. Compare versions:

   • Original budget
   • Previous forecast
   • Current forecast
   • Variance explanations

How to Create Capital Budgets

Project Budgets

For capital projects:

1. Define project:

   • Scope/objectives
   • Timeline
   • Total budget
   • ROI calculation

2. Break down costs:

   Equipment: $500,000
   Installation: $100,000
   Training: $50,000
   Contingency: $65,000
   Total: $715,000

3. Phase by period:

   • Q1: 40%
   • Q2: 35%
   • Q3: 20%
   • Q4: 5%

Approval Workflow

Capital approvals:

1. Business case

2. Financial analysis:

   • NPV calculation
   • Payback period
   • IRR analysis
   • Risk assessment

3. Stage-gate approvals

4. Funding release

5. Progress monitoring

Advanced Features

Multi-Year Budgeting

Strategic Planning

Create 3-5 year plans:

• Revenue projections
• Capacity planning
• Capital requirements
• Headcount growth
• Market expansion

Scenario Planning

Model alternatives:

• Conservative case
• Aggressive growth
• Market downturn
• Acquisition impact
• New product launch

Budget Analytics

Performance Metrics

Track KPIs:

• Budget accuracy
• Variance trends
• Consumption rates
• Approval times
• Revision frequency

Predictive Analytics

Use ML for:

• Expense forecasting
• Revenue prediction
• Anomaly detection
• Trend identification
• Risk scoring

Integration Features

Connected Planning

Link budgets to:

• Sales forecasts
• Production plans
• Workforce planning
• Cash flow forecasts
• Strategic initiatives

External Data

Import assumptions:

• Economic indicators
• Market data
• Inflation rates
• Exchange rates
• Industry benchmarks

Budget Reporting

Standard Reports

Budget Status Report

Shows current position:

• Budget allocated
• Committed (POs)
• Actual spent
• Available balance
• % consumed

Department Scorecards

Visual performance:

• Traffic lights
• Trend arrows
• Progress bars
• Exception flags
• Action items

Executive Dashboards

Real-time visibility:

• Company overview
• Department drill-down
• Major variances
• Forecast accuracy
• Risk indicators

Best Practices

Budget Preparation

• Start early
• Clear guidelines
• Realistic targets
• Document assumptions
• Stakeholder buy-in

Monitoring & Control

• Regular reviews
• Timely reporting
• Proactive alerts
• Quick corrections
• Continuous improvement

Change Management

• Formal process
• Clear justification
• Proper approvals
• Communication plan
• Impact assessment

Configuration

Budget Settings

Navigate to Settings → Finance → Budgets:

• Budget Periods: Monthly/Quarterly
• Control Level: Warning/Hard stop
• Variance Threshold: 5% or $1,000
• Approval Required: By amount
• Version Control: Track changes

Workflow Configuration

• Approval chains
• Notification rules
• Escalation paths
• Delegation options
• Mobile approvals

Troubleshooting

Common Issues

Budget not checking

• Verify control enabled
• Check account mapping
• Review period status
• Confirm dimension setup

Import errors

• Validate templates
• Check codes exist
• Review formats
• Fix formulas

Variance calculations

• Check period alignment
• Verify account mapping
• Review calculations
• Update exchange rates

Next Steps

Learn about Tax Management for compliance and optimization.