Accounting cost center, or cost group planning.
Automatic consolidation of plans allows management to make better decisions.
Costs planning
The planning process is necessary for each organization because it gives a vision of the future desired state. Simply put, the purpose of making a plan is the projection of how much gross or neto profit will be in a given period. In order to reach this figure, at least two plans must be defined. The revenue plan and based on that – the cost plan. The very cost-cutting process in Croatia has been based on “Budgeting“.
Budgeting
Organizational costs planning processes are mostly used by Excel.
Advantages:
- Excel because it is widely available and is located on almost every computer
- It is “free”
- Employees are familiar with the capabilities of the program
Disadvantages:
- Consolidating all plans into one master plan is a tough job and often vulnerable to mistakes
- Speed = Due to the large number of data and formulas, there are often problems filling and opening files
- Verify – there is no just one source
- Comparison with current business results may be difficult if changes occur
“Plans are of little importance, but planning is essential.”
Winston Churchill
Costs plan model
Futura Budget is a module designed to plan the organization’s costs. The introduction process consists of several steps:
Step 1 = Participants
It is necessary to determine who is involved in the process of drafting the plan.
- Controller – person in charge of designing the model of the plan (controlling, accounting, finance)
- IT department – historical data is needed
- Planers – We need to designate individuals and departments that will fill out parts of the plan
- Authorized person – in charge of approving and locking out plans (managers, management)
Step 2 = Creating a Model
The dimensions to be planned are defined
- Defining levels = account, line, or cost group.
- Defining Time Periods = Week, Month, or Quarter
- Define grouping = cost centers, profit centers, organizational units or departments
- Withdrawal of parent data = In most cases financial data from ERP or accounting system is withdrawn
- Defining types of plans = budget, best case, worst case etc.
Step 3 = Create a Calendar
The purpose of creating a calendar is to precisely define the time frames eg,
- Start designing a model
- Define the deadlines of the department
- Defining finishing and adjustment periods
- Authorization deadline
- Defining the adjustment period of the annual plan (monthly, quarterly or semi-annual)
Benefits
Benefits of using the Futura Budget are:
- There is no need to consolidate because the plans consolidate after each save
- Quick entry is enabled based on group entries
- Data is always saved to a unique location
- Current access to all consolidated plans
- Versioning of the plans is automated
- Planning becomes EASY