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Monthly Actuals v Budget Columns!

Benefits of having a current month reporting column for budgetary control`

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Hi Everyone!  I have spent most of my accounting experience in the private sector but am now working for a Local Authority and am looking after a large number of budgets.  I was surprised to see that our budgetary control system only reports on year to date actuals v budget and not also actual month v budget.  I raised this issue a number of times because I feel it is important to be able to focus on our monthly meetings both on the movement for the month and also the year to date position.  However all of the Local Authority Managers think I am mad!  They can see no benefit whatsoever in having this additional column!  I tried to explain in vain that this helps to highlight the movements and also it means that any incremental expenditure is not "lost" in the year to date column.  It also means that every time I review the budgets I have to look at the year to date entries in detail over and over again to see the new entries.    Can anyone please tell me if I am indeed mad!!!  Such a seemingly trivial issue I know, but to me I think the fact that LA Managers can see no merit in this way of working highlights the fact that they do indeed live in a different world!

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By Hugo Fair
05th Jul 2022 11:12

If it's any consolation ... No you're not mad AND yes, "LA Managers do indeed live in a different world"!

Historically this was probably due to funding (not just budgets) being an annual event - including the concept of bidding for new budgets on the basis of 'last year plus' (which was why the rush to spend everything towards the tail end of the year) - but maybe that's just me being generous.

The reality is that an acceptance of annual-only comparators can only lie somewhere between lazy and intellectually incurious ... but if that's what they want, it's up to you whether to invest your time in going beyond your remit.

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By ireallyshouldknowthisbut
05th Jul 2022 11:21

You are the accountant.

Prepare what you think they need to know, and explain why it is important data and what has been missing.

I would agree with Hugo about the focus on annual, and the "spend it before its taken away" mentality, which of course is a product of the reality of those environments.

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By paul.benny
05th Jul 2022 12:32

Do you even have a monthly budget? Or at least one which is not annual budget divided by 12.

It might be worth putting some effort into understanding how budgets are built and how spend is managed before you rush to change. So, for example
headcount is a major driver of cost and so number of people may be the relevant metric.

Does your authority use commitment accounting? If so, cumulative spend against budget is probably more relevant than spend in the month. Unlike private sector, revenues and spend are largely fixed by the start of the year. The objective is more likely to be to manage commitments within the budget rather than spend against budget.

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By Paul Crowley
05th Jul 2022 21:16

Give them what they want.
Year to date v budget is good enough for most non accountants.
When I was a trustee on a charity crated good reports for the monthly meetings. No one but me understood the purpose. All I got was disinterest as all they only wanted was budget v year to date. I complied and then people started to read then.
To most people, less figures is better than clever comparisons.
If income is fixed, money spent is all that matters

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