The Copy/Forecast budgets function in the optional module Budget Management allows you to copy budget or actual amounts from one fiscal year to another. If you copy the current year actual figures, you have the option to forecast the remaining periods. This is useful for creating next fiscal year's budget based on the current year activity--even when the current year is not yet complete.
For example, if you are entering the budget in March 2003 (period 9) for the July 2003/June 2004 fiscal year, the program can create budget amounts for April through June (periods 10-12) based on your year-to-date activity for 2002/2003.
The following is the formula used to calculate each of the period forecasts:
(Year-to-date Actual/Year-to-date Budget) * Period Budget = Period Forecast
Use of the above formula maintains the ratio of actual to budget for the remainder of the year. You can then either elect to keep next year's budget at this forecasted level, or use the option to increase the total budget by an amount or percentage.
Continuing the above example, let's assume we have these 2002/2003 figures to use for forecasting the 2003/2004 budget:
|PERIOD 2002/2003||ACTUAL 2002/2003||BUDGET 2002/2003|
The year-to-date actual through period 9 is $96,300. The year-to-date budget through period 9 is $112,500.
Using the formula above, you calculate: $96,300 / $112,500 =.856 and then multiply this factor by the budget figures for each period to forecast (periods 10-12) for next year's budget. The budget amounts for periods 1-9 fiscal 2003/2004 are the actual amounts copied from periods 1-9 fiscal 2002/2003.
- Period 10: 10,000 * .856 = 8,560
- Period 11: 12,500 * .856 = 10,700
- Period 12: 15,000 * .856 = 12,840