Budgeting

The traditional spreadsheet based budget has been an inefficient and painful process which often lacks effectiveness. With PowerOLAP, enterprise wide budgets can be created, viewed, reported and analysed as soon as the numbers are entered.

Best of all, the entries are made in a fully functional excel spreadsheet connected to the powerful, centralised PowerOLAP database. The data resides in the powerful centralised database and represented to users via Excel.

Why spend more than 90% of the weeks or months needed to create a budget copying, typing and proving a spreadsheet based budget and less than 10% of the time on analyzing the business. These percentages can be turned around to make the budget process what it should be...the glue that links the strategic plan with the financial resources of the business.

The PowerOLAP aggregation and consolidation engine takes care of all additions and subtractions across all views of the data. View the same budget or actual data from as many perspectives you require… by month by Account, by Account by Quarter, by Location by Account by Brand, with budget vs actual vs forecast…..all without changing a single formula in PowerOLAP.

First Time PowerOLAP Budget:
For their first PowerOLAP budget many of our customers use their existing spreadsheet templates to enter current year budgets. All Spreadsheet links to their master sheet are eliminated and replaced by intuitive bi-directional links to PowerOLAP. PowerOLAP is initially used to aggregate and consolidate their data and report through different perspectives. This is a confidence building exercise. Subsequent budgets utilize PowerOLAP’s modeling capabilities.

Driver Based Modeling:
The most effective method of creating integrated budgets is to create models which multiply budget or forecast Sales Units by a Price Book. All Sales, Cost of Sales, Promotional Rebate, Excise & Duty etc number all fall out by month, year, Location, Brand into Sales, Inventory, Accounts Receivable, GST and General Ledger budgets.

Assumption cubes are used to enter assumptions such as Growth Rates, Price Increases, Inflation Rates, Interest Rates all my month, year, state, product category.

Sales budgets and forecasts can be set up to feed :
· Inventory Replenishment models
· Accounts Receivable planning
· Accounts Payable planning
· Balance of Year Calculation.

Multiple Plans:
Many organisations require multi-year plans. Many organisations plan out for 6 years and therefore require each of their 6 Year plans to be retained in PowerOLAP. We simply create Plan numbers such as FY2004-10, FY2005-11 within the budget model as an extra dimension. Variances between one plan and another can be easily determined. All business rules will still apply if the assumptions are also set up by Plan No.

Once the budgets and forecasts are completed additional analysis and predictions are required.

What If Calculations:
Alternative versions of the same budget data can be constructed in minutes using PowerOLAP’s powerful capabilities. There are a number of ways this can be constructed:
· “What If” Version
A completed budget or actual data can be easily transferred to a version called “What If” with each line being multiplied by an Assumptions table which lists the percentage changes required for any line of budget.
· Delta Analysis:
Budget numbers can be stored in the version Budget Baseline. Any changes required by senior management can be made in the Delta ( or change position) Analysis version. Thus the baseline shows values proposed by operating managers while the Delta shows the changes required by senior management. Both Baseline and Delta seamlessly roll up into the version Budget which can then be used for Budget vs Actual comparisons.

Balance of Year Calculations:
No Surprises! That’s what most CEO’s want from the CFO. Budgets or latest forecasts are seamlessly integrated with Actuals to provide a projected Income Statement, Balance Sheet and Cashflow position. For example, the Actuals for periods 1 to 9 need to be added to the forecasts for periods 10-12. In a spreadsheet based system this would be several hours or days worth of work. With PowerOLAP its about 30 seconds worth.