Budget Planning - Revision history

Tim Peeler at 15:28, 25 October 2019

2019-10-25T15:28:15Z

Tim Peeler at 14:54, 25 October 2019

2019-10-25T14:54:53Z

Tim Peeler at 14:52, 25 October 2019

2019-10-25T14:52:53Z

Tim Peeler at 14:48, 25 October 2019

2019-10-25T14:48:19Z

Tim Peeler at 17:37, 6 August 2019

2019-08-06T17:37:15Z

Tim Peeler at 14:43, 6 August 2019

2019-08-06T14:43:49Z

Tim Peeler at 18:38, 16 July 2019

2019-07-16T18:38:51Z

Steve Kleinman at 03:14, 5 July 2019

2019-07-05T03:14:02Z

Steve Kleinman at 03:12, 5 July 2019

2019-07-05T03:12:21Z

Steve Kleinman at 23:03, 2 July 2019

2019-07-02T23:03:13Z

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 ==== '''Instructions''' ====
-===== '''Simplified Relational Budget''' =====
+===== '''Building a Budget the Easy Way''' =====
-To create your simplified relational budget make sure that you have at least 3 years of financial history loaded in your [[Monthly Data Entry|'''Monthly Data Entry''']] area.  If you don't have 3 years of financial history you should use a ''Custom Budget'' which we will discuss later.
+To create your budget using the momentum planning tool, make sure that you have at least 3 years of financial history loaded in your [[Monthly Data Entry|'''Monthly Data Entry''']] area.  If you don't have 3 years of financial history you can still use the momentum planning tool, but the momentum suggestions are more powerful if you can provide up to 5 years of financial history.
-After providing your financial history, you can start using the ''Budget Planning'' tool. In the first section of [[Budget Planning]] select the current year as your ''Planning Year'' (or next year if you are planning for next year's budget), and select ''Simplified'' in the ''Select Budget Type'' section. Remember that any yellow colored box is a box you can alter.
+Below your monthly budget is the summary view for your budget.  This section will show up to 3 years of your summarized financial data: the current year and prior two years.  When viewing or modifying your current year's budget you will also be presented with a break-even budget, your prior year's budget, your current year's budget (reflected by the title ''Working Budget'', next year's budget and your budget variance over the prior year).
-Once you have configured your budget by selecting the year and budget type, your simplified month to month budget will be displayed. You will also see a running cumulative total for each of the previous values as well as an end of year prediction and a percentage of Sales for each of the other values.
+The next section is where our intelligent budget planning system provides recommended momentum based budget selections - ''Budget Planning Momentum Suggestions''.  This section provides 6 options, ''Last Year Median'', ''Last Year Mean'', ''2 Year Median'', ''2 Year Mean'', ''3 Year Median'' and ''3 Year Mean''.  The median values in these options shows the difference in median or ''middle of the road''/''normal'' performance between financial years.  The mean values in these options takes the average total difference between financial years.  Median and Mean values can often be very similar, but using median values will discount very out of the ordinary months.
-By default the ''Simplified Relational Budget'' section is minimized.  Click on the eyeball in the left side of the header to open the section.
+Below the ''Budget Planning Momentum Suggestions'' section is the simplified budget customizer.  First select one of the momentum suggestions and if that budget works for you, simply click the ''Set to Working Budget'' in the ''Simple Momentum Budget'' column. This is the minimum required to setup your budget.  However, we also provide 3 testing budget sections that you can use to customize your simplified budget.
 '''Testing Budgets'''
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-===== '''Custom Budget''' =====
+===== '''Customized Budget''' =====
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-Every business needs a roadmap, or plan, to keep it heading in the right direction. Budgeting is often an area that is overlooked by individuals and businesses alike. Often when one does think about budgeting, budgets are simple, created each month to account for basic expenses. To grow a business you need a plan that gives you the motivation to succeed, and a way to measure your success. You need a roadmap with indicators along the way, not just at the end of the month, to remind you of what you've accomplished and where you are going.
+Every business needs a roadmap, or plan, to keep it heading in the right direction. Budgeting is often an area that is overlooked by individuals and businesses alike. Often when one does think about budgeting, budgets are simple, created each month to account for basic expenses. To grow a business you need a plan that gives you the motivation to succeed, and a way to measure your success. You need a road map with indicators along the way, not just at the end of the month, to remind you of what you've accomplished and where you are going.
 Once your budget is complete, you will have a road map and testable metrics to guide your business decisions throughout the year. Your budget will drive your company ''Success Matrix'', [[Preset GAAP KPIs|'''Preset GAAP KPIs''']], graphs and charts within the [[Leadership|'''Leadership''']] section and even your [[Strategic Planning|'''Strategic Planning''']] budgets.  Setting your budget and committing to that budget is the most important aspect of guiding and informing your business strategy.

@@ Line 3: / Line 3: @@
 [https://profitnavigator.net '''Profit Navigator'''] simplifies budget creation using '''intelligent prediction''' based on your company's [[Glossary#momentum|''momentum'']], past performance, and future goals. Using our Budget Planning Momentum suggestions and budget builder,
-budgets can be as simple as 2 clicks or as detailed as you need for your complex business needs.
+budgets can be as simple as 2 clicks or as detailed and thorough as setting your own month to month Sales, Costs of Goods and Total Expenses
 ==== '''Instructions''' ====

@@ Line 2: / Line 2: @@
 ==== '''Explanation''' ====
-[https://profitnavigator.net '''Profit Navigator'''] simplifies budget creation using '''intelligent prediction''' based on your company's [[Glossary#momentum|''momentum'']], past performance, and future goals.
+[https://profitnavigator.net '''Profit Navigator'''] simplifies budget creation using '''intelligent prediction''' based on your company's [[Glossary#momentum|''momentum'']], past performance, and future goals. Using our Budget Planning Momentum suggestions and budget builder,
+budgets can be as simple as 2 clicks or as detailed as you need for your complex business needs.
 ==== '''Instructions''' ====

@@ Line 2: / Line 2: @@
 ==== '''Explanation''' ====
-[https://profitnavigator.net '''Profit Navigator'''] simplifies budget creation using '''intelligent prediction''' based on your company's [[Glossary#momentum|''momentum'']], past performance, and future goals. For Budget Planning you can choose a Simplified Relational budget, or a Custom Budget. Within the Custom Budget, there are many different ways to customize our tool to your goals.
+[https://profitnavigator.net '''Profit Navigator'''] simplifies budget creation using '''intelligent prediction''' based on your company's [[Glossary#momentum|''momentum'']], past performance, and future goals.
 [https://profitnavigator.net '''Profit Navigator'''] Simplified Relational Budget uses your businesses financial history to quickly and easily create a budget customized for your particular business.  The simplest way to create a budget is to select one of 3 '''momentum budget''' suggestions. You can also customize your budget by providing 3 yearly values: Sales, Cost of Goods percentage and Total Expenses, as discussed in the [[Monthly Data Entry]] section of the document.

← Older revision		Revision as of 17:37, 6 August 2019
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		+	__FORCETOC__
	==== '''Explanation''' ====		==== '''Explanation''' ====

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-==== Explanation ====
+==== '''Explanation''' ====
 [https://profitnavigator.net '''Profit Navigator'''] simplifies budget creation using '''intelligent prediction''' based on your company's momentum, past performance, and future goals. For Budget Planning you can choose a Simplified Relational budget, or a Custom Budget. Within the Custom Budget, there are many different ways to customize our tool to your goals.
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-==== Instructions ====
+==== '''Instructions''' ====
-==== Simplified Relational Budget ====
+===== '''Simplified Relational Budget''' =====
 To create your simplified relational budget make sure that you have at least 3 years of financial history loaded in your [[Monthly Data Entry|'''Monthly Data Entry''']] area.  If you don't have 3 years of financial history you should use a ''Custom Budget'' which we will discuss later.
@@ Line 39: / Line 39: @@
-==== Custom Budget ====
+===== '''Custom Budget''' =====
 The details of deriving a custom budget is too complex and will vary for each business to offer simple instructions here.  Talk to your financial advisor to determine the best budget for your business.  You will need at least 12 monthly values for ''Sales'', but for a fully custom budget you will also need 12 monthly values for ''Cost of Goods'' and ''Total Expenses''.
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-==== For Advanced Learners ====
+==== '''For Advanced Learners''' ====

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 Some businesses may not have enough financial history for our intelligent simplified budget planner to provide a recommendation, however you can still use one of the 3 ''Simple Testing Budget'' sections to provide your own simplified budget if you are unsure of how to set a custom budget for the year.  If you have at least one year of financial history (Jan-Dec of the prior year), you can use the ''Simplified Relational Budget''.  If however you haven't any financial history, you should use the ''Custom Budget''.  You can also choose to use the ''Custom Budget'' at any time.
 ==== Custom Budget ====
-The details of deriving a custom budget is too complex and will vary for each business.  Talk to your financial advisor to determine the best budget for your business.  You will need at least 12 monthly values for ''Sales'', but for a fully custom budget you will also need 12 monthly values for ''Cost of Goods'' and ''Total Expenses''.
+The details of deriving a custom budget is too complex and will vary for each business to offer simple instructions here.  Talk to your financial advisor to determine the best budget for your business.  You will need at least 12 monthly values for ''Sales'', but for a fully custom budget you will also need 12 monthly values for ''Cost of Goods'' and ''Total Expenses''.
 To get started set your ''Budget Type'' to ''Custom''.  If you are only providing 12 months of ''Sales'', set ''COGS Input Method'' to ''% Calculation'' and ''TE Input Method'' to ''Total ÷ 12 Months''.  If you wish to provide month-to-month values for either of ''Costs of Goods'' or ''Total Expenses'' set the input methods of those to ''Monthly Entry''.
@@ Line 59: / Line 52: @@
-Once your budget is complete, you will have a road map and testable metrics to guide your business decisions throughout the year.  Your budget will drive your company ''Success Matrix'', [[Preset GAAP KPIs|'''Preset GAAP KPIs''']], graphs and charts within the [[Leadership|'''Leadership''']] section and even your [[Strategic Planning|'''Strategic Planning''']] budgets.  Setting your budget and committing to that budget is the most important aspect of guiding and informing your business strategy.
+==== For Advanced Learners ====

@@ Line 1: / Line 1: @@
-Every business needs a roadmap, or plan, to keep it heading in the right direction. Budgeting is often an area that is overlooked by individuals and businesses alike. Often when one does think about budgeting, budgets are simple, created each month to account for basic expenses. To grow a business you need a plan that gives you the motivation to succeed, and a way to measure your success. You need a roadmap with indicators along the way, not just at the end of the month, to remind you of what you've accomplished and where you are going. [https://profitnavigator.net '''Profit Navigator'''] simplifies budget creation using '''intelligent prediction''' based on your company's momentum, past performance, and future goals.
+==== Explanation ====
-==== Simplified Relational Budget ====
+[https://profitnavigator.net '''Profit Navigator'''] simplifies budget creation using '''intelligent prediction''' based on your company's momentum, past performance, and future goals. For Budget Planning you can choose a Simplified Relational budget, or a Custom Budget. Within the Custom Budget, there are many different ways to customize our tool to your goals.
-[https://profitnavigator.net '''Profit Navigator'''] Simplified Relational Budget uses your businesses financial history to quickly and easily create a budget customized for your particular business.  The simplest way to create a budget is to select one of 3 '''momentum budget''' suggestions. A momentum budget is [this needs another sentence]. however you are afforded the opportunity to customize your budget by providing 3 yearly values: Sales, Cost of Goods percentage and Total Expenses.
+[https://profitnavigator.net '''Profit Navigator'''] Simplified Relational Budget uses your businesses financial history to quickly and easily create a budget customized for your particular business.  The simplest way to create a budget is to select one of 3 '''momentum budget''' suggestions. You can also customize your budget by providing 3 yearly values: Sales, Cost of Goods percentage and Total Expenses, as discussed in the [[Monthly Data Entry]] section of the document.
 Further you can modify your simplified relational budget using [[Opportunities/Challenges Planning ⟨What-If⟩|'''Opportunities/Challenges Planning ⟨What-If⟩''']] planning or you can create a custom month to month budget.
 To create your simplified relational budget make sure that you have at least 3 years of financial history loaded in your [[Monthly Data Entry|'''Monthly Data Entry''']] area.  If you don't have 3 years of financial history you should use a ''Custom Budget'' which we will discuss later.
-After providing your financial history go to the ''Budget Planning'' section. In the first section select the current year as your ''Planning Year'' (or next year if you are planning for next year's budget) and select ''Simplified'' in the ''Select Budget Type'' section.  You can also click on the ''Tutorial'' link in the top menu on the left-hand side to use a guided tutorial.
+After providing your financial history, you can start using the ''Budget Planning'' tool. In the first section of [[Budget Planning]] select the current year as your ''Planning Year'' (or next year if you are planning for next year's budget), and select ''Simplified'' in the ''Select Budget Type'' section. Remember that any yellow colored box is a box you can alter.
-Below the main settings area, your simplified month to month budget will be displayed.  Before configuring your budget, nothing will be displayed.  After your budget is configured this section will provide your monthly budget for each month of the current year.  Each of your Sales, Cost of Goods, Gross Profit, Total Expenses, and Net Income will be displayed.  You will also see a running cumulative total for each of the previous values as well as an end of year prediction and a percentage of Sales for each of the other values.  By default the ''Simplified Relational Budget'' section is minimized.  Click on the eyeball in the left side of the header to open the section.
+Once you have configured your budget by selecting the year and budget type, your simplified month to month budget will be displayed. You will also see a running cumulative total for each of the previous values as well as an end of year prediction and a percentage of Sales for each of the other values.
-Below your monthly simplified budget is the summary view for your budget.  This section will show up to 3 years of your summarized financial data: the current year and prior two years.  When viewing or modifying your current year's budget you will also be presented with a break-even budget, your prior year's budget, your current year's budget (reflected by the title ''Working Budget'', next year's budget and your budget variance over the prior year.
+By default the ''Simplified Relational Budget'' section is minimized.  Click on the eyeball in the left side of the header to open the section.
 The next section is where our intelligent budget planning system provides recommended momentum based budget selections - ''Budget Planning Momentum Suggestions''.  This section provides 3 options, ''Last Year'', ''2 Year Avg.'' and ''3 Year Avg.''.  Last year will recommend a budget based on your performance between last year and two years ago, this is why at a minimum you need 2 years of financial data loaded not including the current year.  The two year average will recommend a budget based on your performance between last year, the previous year and 3 years prior.  The 3 year average will recommend a budget base on your performance between last year, previous year, 3 years and 4 years prior. Select one of the recommended momentum based budgets to start configuring your budget.
-Below the ''Budget Planning Momentum Suggestions'' section is the simplified budget customizer.  If you are happy with the budget selected, all you need to do at this point is click the ''Set to Working Budget'' button under the ''Simple Budget Momentum'' section. This is the minimum required to setup your ''Simplified Relational Budget''.  However, we also provide 3 testing budget sections that you can use to customize your simplified budget.
+Below the ''Budget Planning Momentum Suggestions'' section is the simplified budget customizer.  If you are happy with the budget selected, all you need to do at this point is click the ''Set to Working Budget'' button under the ''Simple Budget Momentum'' section.
 If your business has seen losses or you feel that you can push your business growth faster than the momentum prediction, you can use one of the 3 testing budgets to set your own customized targets.  Simply provide the end-of-year total of ''Sales'', a ''Cost of Goods'' percent (this is the ratio of Cost of Goods to Sales), and your expected end-of-year ''Total Expenses''.  Our budget calculator will do the rest of the work.  When you are happy with your customized budget simply click the ''Set to Working Budget'' button below the ''Simple Testing Budget'' you want to use.  We provide 3 testing budgets so you can quickly see and set a budget that works for you.
-If you feel that your business should be more conservative this year or you feel you should be more aggressive, you can set - for example - ''Simple Testing Budget 1'' to a conservative budget; ''Simple Testing Budget 2'' to a middle-of-the road budget and ''Simple Testing Budget 3'' to an aggressive budget.  At any time throughout the year you can change your budget to use one of the 4 simplified budgets - our intelligent simplified momentum budget or one of the 3 customized testing budgets.
+If you feel that your business should be more conservative this year, or you feel you should be more aggressive, you can set - for example - ''Simple Testing Budget 1'' to a conservative budget; ''Simple Testing Budget 2'' to a middle-of-the road budget and ''Simple Testing Budget 3'' to an aggressive budget.  At any time throughout the year you can change your budget to use one of the 4 simplified budgets - our intelligent simplified momentum budget or one of the 3 customized testing budgets.
 If for example, you chose a particularly aggressive budget and later in the year find that some difficulty out of your control is preventing you from hitting your budget, you can shift to a less aggressive budget. However, once you have made a decision on your budget for the year you should generally keep that budget and try to hit your performance metrics.  As long as you are outperforming your prior year, your business will be growing.  Keep that in mind and don't be discouraged if you don't hit every metric every time.
-Some businesses may not have enough financial history for our intelligent simplified budget planner to provide a recommendation, however you can still use one of the 3 ''Simple Testing Budget'' sections to provide your own simplified budget if you are unsure of how to set a custom budget for the year.  If you have at least one year of financial history (Jan-Dec of the prior year), you can use the ''Simplified Relational Budget''.  If however you haven't any financial history, you should use the ''Custom Budget''.  You can also chose to use the ''Custom Budget'' at any time.
+Some businesses may not have enough financial history for our intelligent simplified budget planner to provide a recommendation, however you can still use one of the 3 ''Simple Testing Budget'' sections to provide your own simplified budget if you are unsure of how to set a custom budget for the year.  If you have at least one year of financial history (Jan-Dec of the prior year), you can use the ''Simplified Relational Budget''.  If however you haven't any financial history, you should use the ''Custom Budget''.  You can also choose to use the ''Custom Budget'' at any time.
 ==== Custom Budget ====