The General Ledger Budget module is the portal to the information database associated with every Cost Centre/Secondary account code combination within the organization. This database stores Budget, Actual, and Forecast data. GL detail is presented in summary and detail form, with totals available by year or by reporting period.
The General Ledger Budget module is also the portal to the budget preparation process, acting as the entry form primarily for the non-compensation budgeting.
Standard Budgeting Process:
Compensation budgeting is prepared using the Salary Budget module, a traditional schedule-based entry system. Transactions generated by the Salary Budget include detail by Classification, Employee Type, Earning Code, and Benefit Code. Complete data is migrated to the General Ledger Module for review.
As a first step to a new budget year creation, a preliminary budget is prepared. This starting point can be the prior year’s closing budget, the prior year’s actual, a generated forecast, or any combination thereof. This budget amount becomes the Base Budget Amount, an opening value from which all budgeting activities act as auditable adjustments. Additional detail lines can be added as needed, allowing for differing justification and splits for multiple adjustments within a single account combination.
This budgeting process can then run through an internal approval process, locking down approved amounts and only permitting additional budgeting activity via separate detail line and approved reason codes.
Budget Manager was originally designed to follow the Zero-Based Budgeting concept introduced in the early 1970’s. The intent was to start with a zero base, a clean slate, and have an entry system that required detailing every requirement needed to run a department. This was like a grocery list where the trip to the grocery store meant preparing a list of the items rather than a general total of what you were going to spend.
This concept remains integral to the General Ledger Budget module. Organizations end up implementing their own interpretation of Zero-Based Budgeting. This result in a budget with complete detail of required transactions – a manager cannot hide behind the totals. A detail approach allows Budget Committees to have all they need to get results.
Budget vs Actual
Our Information Management Platform is designed to accumulate data from disparate sources and allow for single-point reporting. Actual data can be continuously loaded throughout the year, and reports can be ran to compare the efficacy of the budgeting process to the reality of the organization’s transactions. This variance analysis can be used to refine and update the budget for the current year, or even serve as an additional data source for the next year’s opening balances.