Long-term budget

In Profit you can create a long-term budget for future year wage costs on the basis of currently available figures (deductibles, tax brackets, wage scales, etc).

Description

A long-term budget is created in a separate environment which is designated as a budget environment. You cannot create a long-term budget in your Live environment. An environment is designated as a budget environment by adding ‘(Budget)’ to the description of the environment.

In the budget environment you can create a long-term budget for future year wage costs on the basis of currently available figures (deductibles, tax brackets, wage scales, etc). You can deviate at any level in the CLA, for example parameters, wage scales and salary tables maintained by AFAS. The wage components, wage scales and salary tables in the Profit CLAs do not have end dates. You can delete the end dates in your own wage components, wage scales and salary tables so that Profit will include these in the budget.

By executing the budget process, Profit will process the specified future periods on the basis of the current figures.

Firm entries

You enter firm entries into the budget environment for creating your budget. Firm entries are entries that are certain to occur in the future. Examples of firm entries include:

  • A department is abolished and employees are therefore transferred to another organisational unit.
  • An employee turns 65 during the budget period and can therefore be reported as having left employment.
  • You are no longer journalising the leave balance at the end of the year and you therefore terminate it.
  • You can post the wage entries for the hourly paid employees and fixed salary employees.

If one or more of the 'Reservering verlof uit HRM in geld' wage components is activated in the payroll configuration, the leave reserve will sharply rise during the budgeting process. This is because no (or very few) leave entries will have been recorded for the future. If this is not desired, you can deactivate the 100.009.512 'Uurloonberekening tbv verlofsaldo HRM' wage component. To ensure there are no undesirable RAE entries, you can deactivate the wage component with a date after the budget start date.

Instead of entering wage entries for hourly paid employees (standby workers), you can also record hourly paid workers as fixed salary workers. This means you do not have to enter any wage entries.

After entering the firm entries you can create a backup copy so you can use the firm entries for multiple scenarios.

Scenarios

You can create budgets for different scenarios in Profit. The following are examples of scenarios:

  • Increase or decrease in social insurance costs

    You can deviate from parameters, wage scales and salary tables at the CLA level.

  • Increase in personnel

    You can report employees as employed if you wish to add them to the budget.

  • Decrease in personnel

    You can report employees as having left employment if you wish to reduce the number of employees included in the budget.

To create budgets for different scenarios you can restore multiple backup copies.

Education

Block grant funding was introduced for the education sector on 1 August 2006. Schools are given a total amount for personnel and material expenditures that they are allowed to spend as they see fit. Because of the block grant funding it is necessary that you prepare a long-term budget for the wage costs.

Preparation

Procedure

  • Add a budget plan

    You can add a budget plan to the Budget cockpit in Profit. In the budget plan you specify the employer, period table and the number of years for which the budget is created.

  • View a budget plan

    You can view a budget plan in the Budget cockpit. You can view the status of each budget plan.

  • Budget process

    You can create a budget plan in Profit. Profit calculates the budget during the budget process.

  • View the budget log

    Profit displays the messages that were suppressed during the budget process in the budget log. You can resolve these messages after the budget process has finished. After the messages have been resolved, you re-execute the budget process.

  • View the budget for a single calendar year

    You can use the Cost analysis and the Journal entry analysis to create a budget for a single calendar year, whereby the cumulatives can be viewed in the last period.

  • View a long-term budget

    For budgets spanning several years, you can make an analysis based on the Employee journal entry data collection or use the cost analysis.