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Budget

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Budget lines mimic your current operational chart of accounts. To create your profit and loss tree in Budgeting, budget lines must be created in all levels including the organization level, revenue center level, job class levels, etc. The income and expense line items are assigned dollar and/or percentage amounts. The ultimate goal of Budgeting is to calculate total dollars for every line in the budget. 

About Budget Line Data

Budget line data is the result of the calculations as configured in the Cost Structure tab. The data is viewed in the Results tab.

In order to calculate total dollars, the following formula is used:

Total Dollars = Units x Rate x Factor + Fixed Dollars

The type of data includes:

• Units
• Rate
• Factor
• Fixed Dollars

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units

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units

Units

Units represent how many "things" the line will use in the calculation. For example, rooms, hours, covers, etc. are all units. Units are typically generated by the forecasting process.

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rate rate

Rate

Rates are the dollar amount with which the units are multiplied to calculate revenue. If you are selling your rooms in January for $110.00, that is the rate.

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factor factor

Factor

Factors are additional multipliers you can use to adjust for varying circumstances.

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fixed_dollars fixed_dollars

Fixed Dollars

Fixed dollars are additional amounts that are not affected by the number of units. For example, your telephone bill may be $500/month for basic service with an additional charge of $.05 per occupied room. The fixed dollar amount is the $500/month.

About Budget Line Types

The various budget line types allow you to configure Budgeting to match your property's needs.

The type of budget lines include:

• Total Lines (T)
• Calculated Lines (C)
• Fixed Lines (F)
• KBI Lines (K)
• Job Class Lines (J)
• Market Segment Lines (M)
• Revenue Center Lines (R)
• Percent of Base Lines (P)
• Percent of Hours (H)
• Percent of Labor (L)
• Divider Lines (D)

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total_lines total_lines

Total Lines (T)

Total lines are used to group lines in an organized manner and to build the budget tree structure. Total lines are made up of other lines (children) and serve as a summarization summary of these lines.

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calculated_lines calculated_lines

Calculated Lines (C)

Calculated lines are used to add or subtract budget lines. For example, if you want the Total Revenue line to calculate the sum of all revenue lines in the budget, you create a formula that designates which budget lines should be added together to give you the total.

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fixed_lines fixed_lines

Fixed Lines (F)

Fixed lines are used to enter fixed costs such as mortgage payments and fixed revenues such as that derived from leased space.

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kbi_lines kbi_lines

KBI Lines (K)

A key business indicator (KBI) is a factor that impacts business at your property or is some factor you want to track. KBIs are values, measured in major units of measure (such as covers, rooms, dollars, coin in, guests, etc.), that indicate the activity of your business. Watson  

KBI lines are used to calculate revenue/expenses that are based on external factors (KBIs). For example, if you have a budget line called cleaning supplies that needs to be affected by total rooms, the line would be linked to the Total Rooms KBI during configuration.

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job_class_lines job_class_lines

Job Class Lines (J)

Job classes are functional groups within a department that are used to define specific jobs. Job class lines signify job descriptions and are used to compute the labor portion of expenses. Adding a job class detail line allows you to tie ties it into the division and department that the job code operates under. It is linked to a job class and the number of hours is linked to labor standards.

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market_segment_lines market_segment_lines

Market Segment Lines (M)

A market segment represent a category of rooms and guests. There are four types of market segments: Contract, Group, Transient and Casino. Market segments are used to create market groups which are used as a reporting mechanism to help you track and forecast categories of rooms and guests.

Market segment lines are a summary of the individual marketing segments that were previously forecast day-by-day. These lines behave in the same way as KBI Lines.

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revenue_center_lines revenue_center_lines

Revenue Center Lines (R)

A revenue center is any outlet (besides rooms) that generates revenue. Revenue centers are defined by periods that are associated with KBIs. Typical revenue centers are restaurants, gift shops, lounges, etc. Revenue centers let you gather information about a specific outlet for the purpose of generating a forecast.

Revenue Center lines behave exactly like KBI lines. Typically these lines are attached to revenue lines only, and they are typically used for meal periods in F & B outlets. 

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percent_of_base_lines percent_of_base_lines

Percent of Base Lines (P)

Percent of Base lines calculate their total dollars based on a percentage of dollars from another line(s). For example, the food cost of sales is usually budgeted as a percentage of food revenue. If the line isn't allocated, you can add lines to be used in a calculation.

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percent_of_hours_lines percent_of_hours_lines

Percent of Hours (H)

Percent of Hours lines are used to allocate percentages of job class lines to subcategories of labor, such as company and leased labor. This feature enables you to budget separately for company employees and leased laborers and to configure the appropriate rates of pay for each job line. For example, during peak season, a hotel might employ both company employees and contractors as housekeepers. The controller must budget a percentage of regular and overtime hours and wages for each category. The controller can now create two Percent of Hours budget lines: one for company employees and one for contractors. 

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percent_of_labor_lines percent_of_labor_lines

Percent of Labor (L)

Percent of Labor lines enable you to configure new budget lines that allow a percentage of Hours and Costs to be sourced from a Job class line.

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divider_lines divider_lines

Divider Lines (D)

Divider lines are used to insert blank lines into the budget for grouping purposes. Divider lines do not contain data.