![]() If you do not already own such a system, then acquiring a B&P software package will be expensive - expect to pay at least $100,000. The budgeting capability is built into enterprise resources planning systems. These ratios are useful for determining the extent to which budgeted ratios vary from historical results, which is a prime indicator of excessively high or low assumptions in the development of the budget. There may also be boundary warnings, which notify users if they input budget information that exceeds certain predetermined maximum or minimum values.Ī better B&P system contains an integrated workflow management system, which the budget manager can use to monitor who has updated their information, and which budget information has yet to be input into the system.Ī comprehensive B&P system should provide the purchaser with a complete set of budgeted financial statements (not just the income statement), as well as a set of ratios, such as the current ratio, debt to equity ratio, and days of accounts receivable. This information is useful for adjusting budget information. The system can also present users with the pro forma results of their departments, based on the information they have entered into the system. The system may also allow them to copy forward actual results from prior periods into the budget fields in the model. When users enter data, the system can be configured to present them with just the information required for their department, possibly along with historical or other information that they can use as a basis for developing their budget estimates. Users cannot adjust the budgeting software, other than through adjustments to the various user-specific flags (which are password protected), and so cannot introduce any modeling errors. ![]() The information in this database is rendered into the budget model by the modeling software. This software presents a common interface to all users, and stores all submitted information in a central database. Budgeting and planning (B&P) software centralizes the storage and use of budgeting information.
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