About Planning

Plans and Budgets come in many shapes and sizes and not all planning involves going as far as producing a balance sheet. Many absolve applications do no more than generate Product and/or Customer contribution and profitability analyses, making best advantage of power pivot tables.

Others focus on standard costing, sales analysis or benchmarking… In these cases it's not always necessary to adhere strictly to GAAP (Generally Agreed Accounting Practice).

Double Entry

When you need Balance Sheet Budgeting, it is important to follow a technique that mirrors double-entry principles.

absolve's “Balance Sheet Budget” method works exactly the way your accounting system does. This ties all financial forecasts to your chart of accounts and focuses on the end result. By ensuring that the result of each part of the forecasting process is ultimately debited or credited to the appropriate balance sheet account, the end result is constructed from the outset.

The postings are made to a multi-dimensional “trail balance” from which P&L, Balance Sheet and Cash Flow can be produced at any level of detail. You can even see cash inflows from individual products and/or customers.

Business Simulation

How do your forecasts for planning get into the Budget Trial Balance?

absolve uses the idea of “Sub-Modelling”, which means that for each business activity you plan in detail, the “Business Simulation Rules” (BSRs) are separated into groups — or sub-models. There's a sub-model for each of the main business areas and you can add more for your individual needs.

Typical sub-models are:

Each sub-model calculates individual parts of the budget and then “posts” key results from that calculation (simulation) to the relevant accounts.

See budgeting in action:

• Turner Broadcasting >
• Polhill >

See Also

Overview  Sales Forecasting  Reporting (KPIs, management accounts, allocation, consolidation)  Customer & Product Profitability  Resource Allocation and Capacity Planning 

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