Departmental budgets and cash flow forecasts
Visual Cash Focus easily creates a departmental budget or profit center budget . This is particularly useful in cases where an entity forms part of a greater unit but requires its own individual budget and cash flow forecasts in addition to being included as part of the larger unit. Different branches of a national retail outlet or departments within a company etc could be in this position.
Any number of departmental or profit center budgets are catered for. Each profit center manager can enter their own budgets. Reports include the profit & loss/income statement and cash flows per profit center, per group of profit centers or for the enterprise.
You can determine profitability and forecast cash flow for the whole organization or per profit center. Profit centers or departmental budgets extend the capabilities of your budget model considerably for very little effort.
When to use departmental budgets
There are two methods to preparing a budget involving multiple departments or profit centers such budgets. Which method to use depends on what outcome you require and how you input the data.
- Prepare the independent entities as separate budget models and then consolidate all of the models
- Prepare a single departmental budget which ia a model sub-divided into profit centers.
The determining factor between which method to use is the Balance Sheet. If you want the whole organisation to share a common Balance Sheet then use departmental budgets.