Sales Budgeting

This process is used to create and update a sales budget.

Sales budgets are saved in datasets having Transaction Type - Statistics 33.

Before you start

The process can be started when these prerequisites are met:

Follow these steps

The section below describes the scope of this process.

  1. Defining Sales Budget Version

    A sales budget version is used to identify a version of a budget within a dataset. This budget version is subordinate to the dataset, which means that each dataset can have several budget versions.

    Sales budget versions are created in 'Sales Budget. Open' (OSS420). See Create Sales Budget Version.

    The sales budget version defines the budgeting method. It can be used year after year so all reports that retrieve data from the budget version can be used unchanged at different times.

    However, the budget values can be locked for specific years. See section Locking the Budget Year in this document.

    • Budget Status

      A budget version can be assigned these status codes:

      Status Description
      10 Preliminary. Budget values may not be entered.
      20 Active. Budget values may be updated if the budget is not locked for the current budget year.
      90 Inactive. Budget values may not be updated.
    • Locking the Budget Year

      Each budget year within the budget version can be activated and locked. This is done in 'Sales Budget Year. Open' (OSS428). A locked budget year may not be updated or processed.

    • Field Selection for Budget Values

      'Sales Budget. Enter Values' (OSS421/E) displays four columns, whose contents are determined by the Accumulator Field to be budgeted.

      The accumulator fields that give default proposals are:

      Column Description
      1 Budgeted invoice quantity (UCIVQT).
      2 Budgeted invoice amount (UCSAAM). If budgeting is done per currency code, accumulator fields are used for the foreign currency amount if it is included in the dataset. The amount in foreign currency is then calculated automatically. Otherwise, the amount in local currency is used.
      3 Budgeted costs of goods sold (UCUCOS).
      4 No default proposal. If fewer than four accumulator fields are entered, only three columns are displayed.

      Only four columns are displayed in the panel. If there are accumulator fields, then the contents of the columns can be changed. This is done by pressing function key F4 = Prompt in a column and then selecting a value from the prompt window.

    • Parameters for Supplementing the Budget

      If item number (UCITNO) is a key field in the dataset, four of the budget's data elements can be calculated automatically in 'Sales Budget. Supplement' (OSS250). See the section Supplementing Budget in this document.

      The budget is supplemented with sales prices from the Price List specified for the budget version. If the price list uses a sales price costing, individual prices can be calculated for different keys, such as different customers. Some of the control fields used in price costing models are not as common as the key fields in the dataset. It is therefore possible to enter default values for the following fields per budget version in program 'Sales Budget. Open' (OSS420):

      • Warehouse
      • Customer order type
    • Budget in Foreign Currency

      Budgeting can be done for different currencies in the same budget version, as long as the currency code (UCCUCD) is a key field in the budget version's dataset and the invoice amount in foreign currency (UCCUAM) is one of the data elements.

      By combining budgets in different currencies in the same dataset, the sales statistics can be followed up against the budget. This can be for quantity, sales in local currency, and sales in other currencies in the same report. In this way it is easy to see whether any differences depend on exchange rate changes or other factors.

  2. Entering Budget Values

    Budget values are entered manually in 'Sales Budget. Enter Values' (OSS421). See Enter Budget Values.

    Panel 'Sales Budget. Enter Values' OSS421/E contains four columns for entry of the budget values. This means that four accumulator fields (for example, amount and cost value) can be entered at the same time.

    The user decides which accumulator fields to enter in the different columns. If F4 = Prompt is pressed in a column, valid accumulator fields are displayed. By selecting a field from this prompt window, the contents of the column can be changed.

    The budget values can be entered in any of the following waysthese ways:

    • Distributing Budget

      This method is mainly used for so-called top-down budgeting, where a budget at a high level is distributed to lower levels. For example, a budget for different markets can be distributed to different customer groups within each market.

      To calculate the budget values with a yearly total, a seasonal curve must be specified. This is done by entering a yearly total in the column's uppermost field and then distributing it over the periods based on the curve. Default seasonal curves can be retrieved from the dataset and then changed if needed. For more information about seasonal curve, refer to document in See Also section.

      Since the budget values are always entered on the lowest key level, according to the dataset to which the budget version belongs, different datasets are required for different budget levels. To distribute a budget for different markets to different customer groups, the dataset might be structured in this way:

      Dataset Key 1 Key 2 Key 3 Key 4 Key 5 Key 6
      D1 Market          
      D2 Market Cust. grp.        

      According to the table, the budget values can be entered per market in dataset D1 and then distributed per customer group within the market in dataset D2.

      Budget distribution includes the following phases:

      1. Preparing the budget for the highest level. See Enter Budget Values.

      2. Creating a distribution template. See Create Distribution Template.

      3. Creating distribution percentages. See the following:

        Enter Budget Distribution Percentages

        Calculate Budget Distribution Percentages

      4. Running the distribution. See Distribute Budget Values.

      Distribution Templates

      Distribution templates are entered in 'Sales Budget Distr Template. Open' (OSS422). They are used to define a setup of selection for distributing from one dataset to another. The advantage of creating a template is that the distribution can be modified and rerun if needed.

      Distribution percentages must be entered in order to distribute a budget. These describe how values on the higher level are distributed to each key field on the lower level. To distribute a budget for different markets to different customer groups, the percentages must also describe how the values for each market should be distributed to each customer group.

      Distribution percentages can be generated automatically by referring to a dataset that contains statistical data for the distribution structure, for example sales statistics for the previous year. The percentages can always be changed manually before the distribution is run.

      Distributing Yearly Totals per Period

      The distribution percentages only describe distribution for the entire year, for example how total annual revenues for a market should be distributed to each customer group.

      The calculated yearly totals can be distributed per period in two ways:

      • According to the period distribution from the budget version distributed. then all groups within a market will receive the same period distribution as the market they belong to.
      • According to the period distribution for the statistical data that created the distribution percentages. If the budget for different markets will be distributed to different customer groups, the period distribution is done individually according to the statistical data per customer group within each market.
    • Consolidating Budget

      This method is mainly used when budgeting is started from the lowest level and then totaled into higher levels. For example, a budget per market/customer group can be totaled for each market.

      Since the budget values are always entered on the lowest key level, according to the dataset to which the budget version belongs, different datasets are required for different budget levels.

      To total a budget per market/customer group for each market, the dataset might be structured in this way:

      Dataset Key 1 Key 2 Key 3 Key 4 Key 5 Key 6
      D1 Market          
      D2 Market Cust. grp.        

      According to the table, the budget values can be entered per customer within the market in dataset D2 and then totaled per market in dataset D1.

      Budget consolidation is done in 'Sales Budget. Consolidate/Copy' (OSS220). See Combine and Copy Data between Datasets.

      The alternatives for creating budget values can be combined depending on the work procedures used in the budgeting process. It is possible to create budget values for all accumulator fields in a dataset.

    • Copying Budget

      Data can be copied between different budget years or versions instead of consolidated and copied between datasets.

      It is also possible to copy statistical data and forecasts and use them as a starting point for further processing. For example, sales for the previous year can be used as the basis for this year's budget. See Combine and Copy Data between Datasets.

  3. Supplementing Budget

    A sales budget can be supplemented in 'Sales Budget. Supplement' (OSS250).

    If item number is a key field in a dataset, four accumulator fields can be calculated automatically based on other accumulator fields and different price information, which simplifies budgeting.

    These accumulator fields can be calculated automatically:

    • Budgeted Invoice Amount in Local Currency

      Quantity x Unit price from price list

    • Budgeted Invoice Amount in Foreign Currency

      This is calculated using the amount in local currency. This requires that the currency code is included in the dataset's key. The exchange rate type used is retrieved from the budget version.

    • Budgeted Quantity

      Invoice amount / Unit price from price list

      To calculated budgeted cost of goods sold, the costing type must be entered, and cost prices for the costing type must be updated.

    • Budgeted Cost of Goods Sold

      Quantity sold x Cost price from costing type

    Price list

    Prices from the specified Price List are retrieved for each period according to the period type of the budget version. The prices are retrieved in the same way as during ordinary customer order entry. This means:

    • Prices can vary from period to period.
    • Order-dependent costing elements are taken into account. Prices can also vary for the same item, depending on other key fields such as customer group or customer. See process Sales Price Administration

    If the price list is entered in a currency other than that of the amounts to be calculated, the exchange rate type from the budget version is used for conversion. Any discounts from Discount Model - Customer Order are not taken into account.

  4. Adjusting Budget Values

    The budget values can be adjusted in groups instead of separately. This is useful for budget values that can be adjusted in the same way. For example, a budgeted amount might be adjusted using the same percentage for all items within a certain item group.

    An unlimited number of selection criteria can be defined for each key field, and several accumulator fields can be adjusted at the same time in 'Sales Budget. Adjust' (OSS424). See Adjust Budget Values.

  5. Transferring Sales Budget to FAM Budget

    A sales budget can be transferred to financial system budgeting in 'Sales Budget. Transfer to FIM' (OSS270). See Sales Budget. Transfer to FIM.

    The transfer is made by specifying:

    • From dataset and sales budget version
    • To budget number and budget version in FAM

    If the period division differs between COM and FAM, the one in FAM will be calculated using the COM period's start date.

    The following accumulator fields can be transferred, assuming they are included in the sales budget:

    • Budgeted amount in local currency
    • Budgeted amount in foreign currency
    • Budgeted cost of goods sold
  6. Transfering Sales Budget to Item Forecast

    A sales budget can be transferred to a warehouse in the Forecasting module and in the master demand schedule in 'Manual Forecast. Update fr Sales Budget' (FCS425). See Transfer Sales Budget to Item Forecast.

    This requires that the item number (UCITNO), planning entity (NDCCIT) or family item (FJBUIT) is used as a key field in the selected dataset.

Outcome

Budget values are available so that reports can be created and run against the sales budget. Budget targets can be measured against the sales statistics. For information about reporting, see Report Processing.

The budget values are saved in selected datasets as in the diagram below.

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