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Budgeting dilemma on sales! Help!

Sales income is complex, or is it?

Hello AWeb friends,

Right, tasked with creating a budget for group of 2 companies. Sales revenue split as private clients, council clients (who then have extra income coming in from family as top ups). For example private income is £700 from private but, £400 from council client (with anything from £100 to £3000 in top ups depending on care!) In the previous FCCA accountant's budget the top ups were ignored and budget was as follows;

45 private clients @ £700 avg per month AND 5 council clients @ £400 (rate) per month. This was the sales budgeted for the whole year ignoring the top ups mentioned above which are quite significant for those 5 council clients on average (e.g the actual avg council client fee becomes £650 avg per month! The YTD figures show the company will always be excelling as they are getting sales income higher than budgeted, throughout! Not come across this kind of thing in the game but, previous budget sales don't seem right under any circumstance but, the solution is the issue here... Do I have a budget sales income split as private / council (incl top ups) OR split as private / council / top ups (seperately.. since these are agreed at the beginning of the year and contractually paid by client family, so, budgeted income can only change if a client leaves or a new client starts!).

Your advise or opinions please..

D x

 

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By pacta
21st Jun 2017 21:26

I'd recommend that Council income is simply displayed as a total with its component parts across the lines. It assists in reminding that it isn't all sourced from the council and that, in turn, may have a credit risk. In addition there is also the ability to track the variable element against budget and revise your forecast accordingly.

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By Donna-
to pacta
21st Jun 2017 21:46

Pacta! Thank you so much for a quick response!
That makes sense to me so, I will show the private client / council client budgeted sales income totals and have the breakdown within grouped lines of the council top ups element/s.

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