Why have multiple budgets?
How often do you think about different ‘what if’ scenarios that could make significant changes to your business? Whether it’s leasing the next door neighbour’s block or as simple as comparing two different interest rates for debt servicing. While you’re working through these scenarios are you seeing the big picture at all times? For example, if you decide to hold on to stock as opposed to selling them, how will this impact your animal health and feed costs?
The great thing about budgeting with Cashmanager RURAL is you can build as many budget scenarios as you need throughout the year, and analyse how each budget could affect your farming operation and help drive decision making.
With each budget you can enter specific details such as the opening balance, overdraft rates, credit rates and credit thresholds, notes and GST from the previous year. Give each budget a unique name so that it is easy to identify when you refer back to it.
Best practice for managing multiple budgets
Give it a name: Ensure that each ‘what if’ scenario is well named so you know exactly what it relates to. For example – Lease Mangatapu July 2017 (the name of the budget, when it was created and what year it relates to is a good start).
Lock away your original: If you are adding a lot of different ‘what if’ scenarios it’s a good idea to save an original budget first, so that you don’t accidently overwrite or delete it and can back refer to it. Once you have created your original budget for the year you can lock it away to avoid accidently altering it later in the year.
Save a copy: Save time when creating a ‘what if’ scenario by simply saving a copy of your existing budget, then alter the areas that will be affected by the ‘what if’ scenario. Remove unused budgets If you are creating a lot of ‘what if’ scenarios, it’s a good idea to delete them if you decide not to implement the scenario. At the end of each year have a clean out of any unused budgets.