Revise EPM - comprehensive budgeting tool for your business needs
Budgeting is an important part of setting business goals and creating a business plan. The budget provides numerical guidelines for the company's operations for at least the next 12 months, so it is worth planning carefully and in such a way that the budgeting supports the company's decision-making.
The company's budget consists of the main budget and separately compiled sub-budgets, which contain more detailed information on budgeting, and thus specify the company's main budget. Good budgeting is based on the company's previous budget outturn, and it takes into account the business objectives.
Profit budget indicates the profitability of the budget
The profit budget is a part of the company's main budget and its data is compiled from sub-budgets. The profit budget shows the difference between company's revenues and costs, which equals the revenue, and this way indicates whether the budgeting model is profitable for the business. The profit must meet the company's goals; the goal may be the company's desire to operate independently or, for example, to meet a set of growth targets. If the result is not sufficient, the sub-budgets must be reviewed and the necessary changes made to achieve the desired result.
Financing budget shows the development of cash flows
The financing budget forms a part of the company's main budget and can also be called the cash budget or the liquidity budget. The financing budget describes the adequacy of cash and is prepared based on the profit budget. The financing budget is necessary, as the profit budget alone does not indicate the company's liquidity and cash flow development. The development of cash resources guarantees the company's growth, so if the cash flows decline, the company's growth will also cease.
Sales budget and other sub-budgets
The sales budget sets monthly sales targets, and the sales target for the entire period is formed by adding together the monthly targets. There are several ways to create the sales budget, from which the most suitable for the company should be chosen. The traditional way is to set product prices and multiply the product's monthly sales volume by its selling price. Other methods to form the sales budget include budgeting the company's monthly quantity of customers and the price of the customer's average purchase and multiplying them together.
Other sub-budgets include variable and fixed cost budgets and the marketing budget. Budgeting should be designed so that the sub-budgets complement each other in the big picture.
Monitor the development of the budget as it is compiled
With the Revise EPM budgeting tool the budgeting can be split and fill sales, turnover, salaries, variable costs, fixed costs and investments separately. Each part of the budget can be designated to be filled by it's responsible person and this way the separate parts of the budget can be filled by different persons. The company's administrator can monitor the development of the budgeting in real time. The previous budget can be selected as the budget base, using e.g. the previous year's budget outturn, and the new budget can be created based on the previous outturn.
During the entry, the review level can be flexibly varied at the annual or monthly level, at the account or account group level, and different percentage changes can be given at the same level.
Multiple budget versions
The tool allows you to create and save different budget versions, so during the budgeting process you can compare the impact of different budgeting methods on the final budget. Different budget and forecast versions as well as outturn data can be used as the basis for forecasts made during the financial year. Correspondingly, the forecasts can be used as the basis for creating a new version of the budget.
Nowadays the business changes are rapid, so they must be responded to in the shortest possible time. Creating one budget version once a year is no longer enough. Instead, a successful budgeting process requires constant monitoring and rolling budgeting.
In the rolling budget, the budgeting period of the previous 12 months is always extended by one month. This way the company always has the budget, i.e. the financial goal, available for the next 12 months. The outturn of the previous budget month is a good basis for the additional month's budget and it simplifies the maintenance of the budget for the next 12 months. The company's management greatly benefits from the rolling budgeting when planning policies and making decisions.
Implementing the rolling budgeting with Revise EPM is simple, as you can directly use the previous month's outturn data as the basis for creating the additional month's budget.
See also other Revise EPM tool features
The tool allows you to create all the reports you need. Reports for budgets, forecasts and different kind of comparisons can be done quickly.
Revise EPM includes standard reporting packages, which can be easily finalized with your own reports and graphs.
With Revise EPM you can easily implement various forecasts; profit forecast, sales forecast and balance sheet forecast. The tool includes a 12-week rolling cash flow forecast.
You will have better understanding of future business possibilities when you have accurate data available.