A budget is a prediction or forecast of a future event. It helps an organization to carefully consider the expected demand for its products or services and, allocate the necessary resources required to meet that demand.
The main focus in budget entry process is to support the planning process and take advantage of the newly improved solution for planning, budgeting, forecasting, consolidation, reporting and analysis in IFS Application. Since organizations are moving towards continuous planning and monitoring IFS Application has incorporated the budget process component to meet this demand. The budget entry process facilitates forecasting a budget for any given period of time, e.g. quarterly budgeting, half yearly budgeting, yearly budgeting etc.
A key aspect of this feature is the gathering of process related information and the ability to support a budget template concept based on the usage of Excel budgeting functionality. IFS Business Reporter which extends the Microsoft ExcelŽ platform is a classic example of secondary tool support. Its flexibility in cross functional support helps you to formulate reports for planning, budgeting and forecasting and seamlessly transfer them to IFS Application. As a result improvement in the process support is inevitable, e.g. budget structures.
Budget entry process supports the Top Down approach to budgeting as well as the Bottom Up approach to budgeting. Top down budgeting can be used by the top management to express their performance goals and expectations of a budget. Supervisors and middle managers can use the Bottom Up approach to prepare the budgets and then forward them up the chain of command for review and approval. In order to carry out this process budget nodes can be used to communicate information up the ladder and vice versa. A node will gain authority over the budget process depending where it is placed in the budget structure. The budget process uses budget templates to hold budget related information such as user roles, code parts, currency codes, etc.
Before starting the budgeting process, user roles must be assigned and clearly defined. Administrator, Responsible and Approver are three types of user roles available in IFS Applications. The administrator plays the role of a super user and has full authority over the budget process. On the other hand the users with Responsible and Approver roles have limited authority over the process.
In order to steer a budget forth budget drivers should be identified and incorporated within the budget entry process. The Budget Driver can be used to support the planning process. There are two types of budget drivers, namely True Drivers which are used as quantitative measurements, e.g. headcounts, number of product orders and Factor which identifies social changes, market variations and trends.
The General Ledger Budget functionality will be updated with information from the Budget Process component. The role of the General Ledger Budget functionality is to store the financial part of a completed budget process and be compared with that of the actual values within IFS/Financials.
IFS Business Reporter can be used to create and analyze information based on data available in budget transactions in IFS Applications. For more information refer Information Sources in IFS Business Reporter.