As the budget owner, you start the budgeting process by creating the budget workbook. This step is also referred to as the budget setup or budget configuration. The physical budgeting occurs after the workbook is created, using the workflow.
You base your budget on one of the Phocas databases to which you have access. There are two key types of databases, and therefore, there are two types of budgets: financialand operational. You create both types of budgets in the same basic way, however, there are a few different steps, so they are outlined in separate sections below. In both setup screens, the settings are organized into tabs, in which many options are automatically selected for you, to save you time.
Prerequisites
Before you create your first budget workbook, we recommend you take the following action:
(Financial budgets only) Ensure your Profit and Loss statement categorization is complete.
Get a clear understanding of how your organization currently budgets, and at what level of detail, then consider if you want to make changes to the current process. It is best to plan how you want to structure your budget before you create it. Right after you create the budget, you have the chance to change the workbook setup but when you edit any of the budget values, you will not be able to make many changes to the workbook setup.
Identify who needs to access the budget. All users who access the budget also need access to the Financial Statements module (to some degree) and permission to access the underlying database.
Getting started
While you can create a financial budget from within the Financial Statements module (as explained in the next section), you can create both financial and operational budgets in Budgets & Forecasts, in two locations:
On the Budgets & Forecasts homepage, in the top-right corner, click Create budget.
Within an existing budget, in the top-left corner, click Budget > Create budget.
If you don’t see either of these options, it means you don’t have permission to manage budgets and forecasts.
What happens next depends on your database access. If you have access to both types of databases, the Create budget screen displays, in which you need to select the type of budget you want to create. If you only have access to one type of database, you skip the Create budget screen and go directly to the workbook setup screen for that type of database.
Financial budget
The financial budget is based on a financial database, which contains data from your financial statements.
Although you can create a financial budget in Budgets & Forecasts (as explained in the Getting started section above), the best place to do it is from within your Financial Statements module. There, you can set up the Profit and Loss statement, then click Budgets > Create budget to automatically create the budget, skipping the manual setup outlined below. See Create a budget from within a financial statement (one-click budgeting) for more information.
If you create the budget via Financial Statements, you can then skip to the Next steps section below. However, if you create the budget in Budgets & Forecasts, you must set up the budget as follows:
Enter a name for the budget. For example, Budget 2024.
Select the database on which to base the budget. This setting determines where the budget data and structure comes from. A default database is selected for you but you might have others to choose from.
Select the Profit and Loss statement. This setting acts like a template as it determines the layout of the budget. A default statement is selected for you but you might have others to choose from if your organization has created them in the Financial Statements module.
Change the budget owner, if required. By default, you are the budget owner, as you are creating the budget. Typically, you would leave this as is but you can select another user if you want to delegate the workflow management to them. Learn more about the types of users in Budgets & Forecasts.
Add other budget administrators, if required. By default, you are a budget administrator, as you are creating the budget. You can add other users as administrators to help you manage the workflow. Ensure the selected administrators have full access to the database on which the budget is based.
Click Next.
Select the period type for the budget: Year, Month or Custom (such as Quarterly).
Select the start and end dates for the budget period. For example, from April 2023 to March 2024. You can create a budget up to -3 years from the current date.
Set the measure format to determine how the measures (numerical values) display in the grid.
Select the baseline data structure for the budget:
Stream - Fill the budget with values from an existing stream of data in the database, as a starting point that you can later adjust. For example, you could use your current year's actuals or the previous year’s budget values.
Zeros - Fill the budget with zeros ($0.00), so you can start with a clean slate.
Change the default Stream settings, as required:
Baseline (stream 1) - The available options correspond to the streams that have been added to the database. You might prefer to select a different stream if its structure better matches the new budget you want to create.
Measure - The available options correspond to the measures in the database, such as Local Value or Reporting Value.
Offset (applicable to stream values only) - If you're budgeting by year, the offset defaults to -1 and if you’re budgeting by month, the offset defaults to -12 but you can change this offset as required. For example:
If you're creating a budget for the period of April 2022 to March 2023, the actuals will be for the 12 months commencing April 2021 (the budget for April 2022 will include April 2021 data). If, for example, you want to build a budget based on an existing budget stream, you could select an offset of 0.
If you’re partway through the year and therefore, your actuals don’t yet include the entire year’s data, you’ll see a warning note telling you the actuals are slightly out of range. Any months not yet completed will populate with zeros in the workbook. For example, if you are currently in November 2020, the December 2021 budget will populate as zeros because December 2020 currently has no activity. You do not need to take any action here. When you get to the workbook, you can enter data manually in the zeros cells, copy forward data from the other months as a starting point, or use a comparison row to reference another stream.
Click Next.
The hierarchy settings determine how many levels of data are in the budget and how those levels are ordered. In other words, the hierarchy determines how the various dimensions in the database are grouped in the budget. The highest level (dimension) is always the Profit and Loss Category, which includes items such as Revenue and Expenses. The lowest level, where the workflow sits, is always the General Ledger account. You can leave the default hierarchy as it is, or add levels and apply filters, as required.
You have the option to filter the levels in the budget or apply a filter to the whole hierarchy. So rather than have one large budget, you could create multiple, smaller budgets instead, then publish each one to the same stream.
(Optional) Add a level: Click Add level and select the dimension you want to add as another level in the budget hierarchy. You can add up to four additional levels to sit between the highest and lowest levels. The maximum number of levels any budget can have is six. If you do not add levels now, you can add more levels later.
(Optional) Apply a level filter: Click the Filter dimensions button next to the level and select the entities you want to include, then click out of the entity list to apply your selection.
(Optional) Apply a budget filter: Select the Filter… checkbox > select the dimension that you want to filter (you can't select one that’s been added as a level) > select the entity you want to use as the filter > click out of the window to apply your selection.
Click Save and finish.
Operational budget
The operational budget is based on a database that contains operational data such as sales, purchases, and inventory. This data has more detail, such as the sales breakdown (by customer, product, sales rep, channel), primary and secondary class products, pricing, expenses by provider, headcount numbers, payroll expenses, and so on.
The setup for an operational budget is as follows:
Enter a name for the budget. For example, Budget 2024.
Select the database on which to base the budget. This setting determines where the budget data and structure come from. A default database is selected for you but you might have other operational databases to choose from, such as a Sales or Purchasing database.
Change the budget owner, if required. By default, you are the budget owner, as you are creating the budget. Typically, you would leave this as is but you can select another user if you want to delegate the workflow management to them. Learn more about the types of users in Budgets & Forecasts.
Add other budget administrators, if required. By default, you are a budget administrator, as you are creating the budget. You can add other users as administrators to help you manage the workflow. Ensure the selected administrators have full access to the database on which the budget is based.
Click Next.
Select the period typefor the budget: Year, Month or Custom (such as Quarterly).
Select the start and end dates for the budget period. For example, from April 2023 to March 2024. You can create a budget up to -3 years from the current date.
Set the measure format to determine how the measures (numerical values) display in the grid.
Select the baseline data structure for the budget:
Stream - Fill the budget with values from an existing stream of data in the database, as a starting point that you can later adjust. For example, you could use your current year's actuals or the previous year’s budget values.
Zeros - Fill the budget with zeros ($0.00), so you can start with a clean slate.
Change the default Stream settings, as required:
Baseline (stream 1) - The available options correspond to the streams that have been added to the database. You might prefer to select a different stream if its structure better matches the new budget you want to create.
Measure - The available options correspond to the measures in the database, such as Local Value or Reporting Value.
Offset (applicable to stream values only) - If you're budgeting by year, the offset defaults to -1, and if you’re budgeting by month, the offset defaults to -12, but you can change this offset as required. For example:
If you're creating a budget for the period of April 2022 to March 2023, the actuals will be for the 12 months commencing April 2021 (the budget for April 2022 will include April 2021 data). If, for example, you want to build a budget based on an existing budget stream, you could select an offset of 0.
If you’re partway through the year and, therefore, your actuals don’t yet include the entire year’s data, you’ll see a warning note telling you the actuals are slightly out of range. Any months not yet completed will populate with zeros in the workbook. For example, if you are currently in November 2020, the December 2021 budget will populate as zeros because December 2020 currently has no activity. You do not need to take any action here. When you get to the workbook, you can enter data manually in the zeros cells, copy forward data from the other months as a starting point, or use a comparison row to reference another stream.
Click Next.
Next steps
After you complete the budget setup, or automatically create and set up a budget via Financial Statements, you should consider taking the following actions:
Explore your new budget workbook to become familiar with its key elements and features. Expand the tip below to see how the budget setup corresponds to the output.
Edit the budget setup, if required, before you edit any of the budget values. For example, you might want to add or remove a level. Also, if you automatically created the financial budget, you’ll probably want to change the following items at least:
Name: This automatically generated name is Profit and Loss created [date], where the data is the date and time the budget was created.
Period: The date range comes from the current period of the financial statement. Typically a budget looks at the time ahead, so you’ll probably want to change this current period to a future one and use the offset option.
Proceed to add further detail to the budget workbook as required. For example, you might want to add tabs for your Balance Sheet and Cash Flow budgets.
