This process is used to create a new budget from previous budgets and actual results. This is done by adding actual results to a specific period and budget to the later periods. This addition results in an estimate for the year, which can than be adjusted up or down by a percentage.
The budgets created in this way can be either final budgets or used as the basis for adjustments to the budgets of each budget officer.
Select budget as basis for calculation
Calculate new budget
Update new budget
Base for adjusting budget
Select Budget as Basis for Calculation
This activity involves selecting the budget used as a basis for the calculation in ‘Budget. Create for Next Year’ (BUS120).
Calculate New Budget
This activity involves calculating new values from each element in the budget calculation template in ‘Budget. Create for Next Year’ (BUS120). Each element contains the following information:
The account entries expected to be included in the calculation must be connected to an element, since only these connected account entries will be selected for the budget calculation.
The account entries are stored in the accounting string used to update the new budget. In this way, several accounts can be totaled into a different account.
Trend calculation is when the newly budgeted totals (added to the last periods) are adjusted using the same ratio as actual against the original budget during the previous periods in the budget year. For example, if actual for the first nine periods has been 75 percent of that budgeted, then actual for the last periods is also likely to be 75 percent of that budgeted.
Update New Budget
The final activity involves updating the new budget with the calculated values in (BUS120).
Basis for Adjusting Budget
The new budget can be used as the basis for revising the budget from each budget officer. This depends on the report layout selected to print the new budget in (BUS120). When this is done, the budget is sent to each officer to be supplemented or approved.