Sage 300 Can Help You with Budgeting

Sage 300 ERP can be of great help to your company with its annual budgeting cycle. Using an ERP system makes it much easier to pull up past history, performance, and projections to build out new budgets. Planning becomes that much easier when the data you need is at your fingertips.

Mindover Software offers many resources to help you get the most from Sage 300. Visit our Sage 300 Tips and Tricks page to learn how to use all of the wonderful features in your Sage 300 ERP package.

Using ERP to Assist with Budgeting

Good budgets encompass three items: past year performance, anticipated or projected revenue, and projected expenses. Analyzing all three leads to an accurate budget that neither overstates nor underestimates the financial needs of a company.

Sage 300 ERP offers regular and timely access to your company’s financial information. Because the data from Sage 300 is updated in real time, you can check forecasts versus actual at any moment. Estimating demand and using data to determine inventory levels, restoring needs, and shipping updates all adds to your company’s productivity and efficiency. It also helps you estimate whether you need to budget for more inventory, additional advertising, or other needs.

As you sit down to develop your new budget, consider running reports from your ERP system. Depending on how you’ve established your current reporting system, you’ll find the following reports helpful:

Fiscal year-to-date comparisons: These comparisons help you review your overall profit and loss statement against previous performance to date. You can analyze revenues and expenses by category and study specific categories for further information.

Accounts payable: Your payables reflect debts that still must be paid. Review recurring expenses and note which areas, if any, you can cut expenses. If none, account for them in your new budget.

Accounts receivable: Before budgeting for next year, make an effort to close outstanding receivables. Review customer accounts to make projections about income for the next fiscal year.

Once you have these figures, comparing them to regional economic data and industry-specific data can be helpful. Analyzing actual versus projected, and comparing it to local and national industry estimates, all help you build the big picture you need for budgeting in the new year.

Should You Use Zero-Based Budgeting?

There are several methods of building out a budget. Some companies start with a fresh slate every year based on needs. This “zero-based” budgeting starts with a balance of zero, and managers must defend each year’s budget anew. Zero-based budgeting takes nothing for granted and forces managers to think through their business decisions each year so they do not grow complacent in their thinking (or budgeting.)

Incremental changes are another budget-building method used in some industries. Information obtained from Sage 300 ERP can help you build out incremental changes based on percentages derived from the previous year. If sales increased 6%, you can build out incremental additions to your inventory, raw materials purchases, and other items you budget for each year.

Both methods are fine, and either one may work well for a company. The important thing is consistency with budgeting. Once you’ve chosen a budgeting method, Sage 300 ERP can support budget building with accurate data.

Budgeting is an important part of a company’s annual cycle of controlling costs and planning for the future. Fortunately, with software such as Sage 300 to assist, you’ve got the data you need to budget more easily and effectively.

Mindover Software

Mindover Software provides business software and solutions to companies big and small. We help companies select and use technology, adapting to the ever-changing demands of their industries through new and innovative software products. Contact us today for more information.

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