- July 23, 2021
- Posted by: Patrick Ngotho
- Category: Excel
As a business owner, you understand the value of a budget better than anybody else. A budget is essential because it enables you to better understand how much money you have, what your expenses are, and how you’ll be able to afford future purchases.
In this article, we bring you a different aspect of the budgeting process – the Budgeting Tool Database. It is our hope that this will be helpful for your next budgeting phase.
Why a database?
Richard did not understand why Charles insisted on incorporation of a budget database for the budgeting tool. Charles proceeds to explain that any form of data that is used for analysis is best stored in a database.
Charles heads the Reporting department at Get Fitted (a fictitious company). He knows that for budget data to be easy to manage and analyze, a budget database is key. Get Fitted has 25 “shops” (representing Profit Centers) across the East African region.
To be effective, a budget database needs to have 4 key elements in it’s design.
The following are the 4 key elements in the database
1. Data structure optimized for budget data
The data structure design of the budget database needs to incorporate the following dimensions:
⇒ Period dimension – This ideally should include Month, Quarter and Year.
⇒ Chart of Accounts dimension – This should include the current CofA as per the existing financial system in use. Charles uses the CofA in the approved database for the new business entity.
⇒ Geographic dimension -, This should include the geographic structure as per the company’s definitions. Charles ensured that he based this on the regions defined by the business in the various countries covered.
⇒ Organizational structure dimension – This should include the company’s business structure. Charles ensured that he incorporated the various profit centers and business lines in this.
⇒ Base data element – This captures and maps all data points onto the above 4 dimensions.
2. Historic data transformation and loading
Charles ensures that the historic data (that is Actuals data) of the entities before the merger would be loaded and mapped correctly. Get Fitted merges with Moto Fiti to form a new entity, this means that the different data sets for the 2 entities before merger have different formats.
The process would entail being able to identify for each data point loaded it’s period, CofA, Geographic link and organization structure link. For historic actual data this process is not straight forward since the old data format may not have incorporated all these elements.
Where some of these dimensions are incorporated, they may not identified in the same way across different data sets. The data transformation process needs to be very fast and efficient, the budget database level makes this happen.
3. Budget template data transformation and loading
Loading budget data onto the template is straight forward since it was designed with the budget database in mind. Charles just needed to create a transformation process that incorporated mappings for each data element included in the budget template.
4. Budget reports
Once the budget data is in the database, the management is keen on the reports that are generated. Charles knew that the management would be interested in various views of the budget data. This was made easy by utilizing the various dimensions that were already incorporated in the budget database.
The period dimension made it possible to get reports by period. The CofA dimension made it possible to get reports that breakdown the numbers by CofA. Each of the dimensions made it possible to get a specific view of the budget data.
Budget reports are the final output that the management consumes when approving the budget proposals. Without an enriched and flexible reporting aspect, a budgeting tool would be dead.
If you’d like to implement a budgeting tool that will help you better understand your expenses and revenues, get in touch with the team at Sunesis Consulting today and see how we can help!