Advanced budgeting: A powerful function of Business Central

Advanced budgeting: A powerful function of Business Central

Advanced budgeting is smart budgeting — it maximizes all of your business data to enhance your resource allocation processes. This is why many businesses seek enterprise resource planning (ERP) platforms that let them do just that. Fortunately, Microsoft has developed Dynamics 365 Business Central (BC), the most powerful ERP platform today. They've partnered with experienced VARs to bring their solutions to businesses worldwide.

With Microsoft's robust ERP solution, you'll benefit from the following advanced budgeting functions.

Create cost budgets

Cost budgets are created to cover a fixed period, with fiscal years and calendar years being the most common duration periods covered. Business Central will let you create as many cost budgets as you need, and you can either manually create a new one, import a cost budget from an external app, or copy an existing cost budget as the base or template of new cost budgets.

Analyze actual amounts versus budget amounts

Analyzing actual amounts versus budget amounts involves comparing how your actual expenditure turned out against your cost budget prior to the purchase or expense. With Business Central, you can either view actual and budgeted amounts for all accounts or view actual and budgeted amounts for several periods.

To view actual and budgeted amounts for all accounts (to see the data across all accounts for the same date), first click on the magnifying glass icon and type Chart of Accounts and choose the related link. Once the Chart of Accounts page opens, choose the G/L Balance/Budget action. At the top of the page, fill in the fields to define what you wish to see. You’ll see on the leftmost column the chart of accounts (CoA). On the rightmost side, you’ll see five columns — the first four show actual and budgeted debit and credit amounts for each account, while the fifth column shows the proportional relationship between the actual and budgeted amounts on the G/L account.

To view actual and budgeted amounts for several periods (to see the data for several dates for one account), first click on the magnifying glass icon and type Chart of Accounts and choose the related link. Once the Chart of Accounts page opens, choose the relevant general ledger account and then click on the G/L Account Balance/Budget action. At the top of the page, fill in the fields to define what you wish to see. Instead of viewing the actual and budgeted amounts for all accounts under one period, choose several periods under a single account.

Account for costs

Cost accounting is a crucial part of running a business as it determines your business's operational expenditures, allowing you to learn how to use resources efficiently. Cost accounting functions in Business Central will help you analyze the types of costs your business incurs, where these costs happen, and which specific business units bear the costs.

In Business Central, you’ll get to define cost types, cost centers, and cost objects. The chart of cost types is structured and configured to resemble the General Ledger Chart of Accounts, and you can transfer G/L income statement accounts into your cost accounting sheet should you need to. The same can be said for cost entries, cost journals, and cost allocations.

Posted cost entries are used to build reports and statistics. You can set the sorting of the results and set the filters you need to sift through the data to be displayed. You can also use the standard account schedules to define how your reports for the chart of cost types will be displayed in the report.

Prepare financial reports

Getting insight into your financial data is as simple as checking your account schedules, which analyze figures in G/L accounts and compare G/L entries with G/L budget entries. You can then access various charts and reports with the Financial Statements action on the Business Manager and Accountant Role Centers.

Business Central even provides some sample account schedules that you can use as templates for your own business, but you can always build your own account schedules up to your own specifications. You can also compare two or more account schedules using formulas, so you can generate custom financial reports and set up various report layouts. An experienced VAR like WhiteOwl should be able to provide you with more in-depth guidance on how to prepare financial reports.

Generate analysis reports

Analysis reports will help your business make strategic decisions. For instance, sales managers should have the data they need to assess turnover, gross profit, and other key sales performance indicators, while purchasers will want to assess the dynamics of purchase volumes, vendor performance, and purchase prices. Analysis reports will let you leverage your own business data to help you decide how to move your business forward.

With Business Central, you can do all these and more on the Analysis Report page. Set up your lines or line templates to view different line and column layouts, then you can start generating personalized reports focused on your selected accounts. To view your data and analytical views, click on the magnifying glass icon and enter Analysis Views and choose the related link. Then, select the view you wish to have and choose the Analysis by Dimensions action. Fill the empty fields as needed and then choose the Show Matrix action to see the analysis.

A good ERP provider will not only supply you with the software your business needs; they should also provide you with consultation based on your based needs and best practices, on how to maximize your investment. Working with knowledgeable and experienced VARs is a must when migrating to a cloud-based ERP like Business Central. Contact WhiteOwl to learn more about what we can do for you.


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