A budget is a tool for tracking when and how you earn or spend money. Creating a budget is an important part of your overall success and security, as it allows you to oversee and better understand whether your business has enough revenue to pay its expenses. Using a budget can help you make more informed financial decisions.

Budgeting is an ongoing process rather than a one-time exercise because your business revenue and expenses could change anytime. It may be worth revisiting and reworking your budget monthly, quarterly, or after changes to your business, such as big expenses, occur. This will help you stay on track to achieve your goals.

A budget sets the expectations within which a business will operate – it creates financial stability since it sets a plan for the future. Businesses typically set expectations for revenue and expenses, i.e., what you expect to earn and what you expect to spend. If a business tracks against its budget, it will be expected to make a profit. Typically, businesses create a budget for a planning period, such as a financial year.

Syft's budgeting feature allows you to create an integrated budget across the profit and loss statement, balance sheet, and KPIs, as well as non-financial data from Connections. Building a budget in Syft ensures that all financial statements are linked; any impact to your profit and loss statement will carry through to the balance sheet and KPIs (and vice versa).

A budget sets expectations for a business's operation, creating financial stability and a performance benchmark. Businesses usually set revenue and expense expectations for a planning period, like a financial year. Tracking against the budget helps ensure profitability and allows for adjustments when necessary to stay on target.

Let's get started with your first Budget. Navigate to "Forecast" on the left menu bar and select "Budget." You'll land on the Budget dashboard. Now click "Add Budget," and you'll be prompted to set up your first Budget.

There are a few advanced options that you can either leave as default or ignore on setup.

There are five methods to create a starting point for your budget:

If you want your budget to start with historical or "flat" data, we suggest using the last period or last value methods. Budgeting adjustments (discussed in the next section) will be more apparent under these methods. Seasonality and trend methods are useful if you want a quick budget or don't have many adjustments to make to your budget.

If the Trend or Seasonality options are used to create the budget, the calculation is only applied to the Sales account, while all other line items are kept in proportion to the Sales account.

In "Analyze," you can compare actual figures to your budget, either against the total budget or specific periods within it.

Budgets have total columns that can be optionally added on creation or edit. This mimics the behavior when you download a budget to Excel. Please note that only monthly budgets can add these total columns since they appear every 12 months.

To add a total to a budget column, click "Add budget." Then, in the Add budget dialogue box, you will see you can toggle on the option to "Show total columns."

Budgets have their own saved layout configuration for hiding or showing line items. This is shared across the P&L and BS in the item and is initially set to the default layout's configuration. Changing the layout that is applied thus only affects the rows' structure. Click on "Layout options" within your budget's P&L or Balance Sheet to change the layout or the layout view, as shown in the image below.

When you create a budget, you have the option to make adjustments. To add an adjustment, click on either "Add adjustment" or navigate to the Adjustments tab within your budget.

You can then fill in all the relevant details for your budget and click "Save". The adjustment will be added to the budget. To view the impact of this adjustment, click "Highlight changes." A red highlight signifies a negative change, while a green highlight signifies a positive change. There will be a set of up and down arrows next to any account that you have adjusted.

To gain even more detail, click on the account you have adjusted. This will open a line graph that visualizes the impact of the adjustment on your budget. You can then click on any point on the graph to highlight that value, and you will see this value light up in the table, too.

To gain even more detail, click on the account you have adjusted. This will open a line graph that visualizes the impact of the adjustment on your budget. You can then click on any point on the graph to highlight that value, and you will see this value light up in the table, too.

Once you create an adjustment, it will be added to the budgeting adjustment table below the financial statements. Remember to provide a description for each adjustment so that you can determine the impact of each individual adjustment. Adjustments are also useful if you choose to export the budget to PDF; they serve as a trail of budget changes that your team or clients can read through.

If the red banner error message is shown when editing a Forecast or Budget, please edit the budget or forecast and set the layouts to “No Layout”. Click "Save" and then complete your edit.

There are several options for once-off and recurring adjustments. Although the options are self-explanatory, let's unpack each in a little more detail below:

Connections pull data from the primary inputs and activities that drive a business's operational and financial results. With Syft's Connection-based budgeting, you can use operational data specific to your business to create meaningful adjustments to your budget.

First, you'll have to upload data into Syft via the Connections tab. The non-financial data allows you to work with Connections on a budget and can include anything from website visits to units sold. Once you have Connection data in Syft, you can use any variable to drive any profit and loss or balance sheet account.

To apply a Connection to an account, create a budgeting adjustment by clicking an account name (remember, a budgeting adjustment is something that you expect to happen in the future which will impact your financial position). On the budgeting adjustment, select "Formula" under "Impact" type. You'll notice a "Connections" button under the create an equation input box. You'll have the option to select any variable as a driver from your non-financial data (along with the period; either current, prior or prior year).

Once you've created a complete budget with all the budgeting adjustments you desire, you can see all your saved budgets on your dashboard. You can either edit a budget (which will take you to the financial statements for that budget), download a budget, or delete a budget.

If you choose to download a budget, you'll be given the following options:

You are able to add a budget column to your Build P&Ls or Build Balance Sheets which will sum multiple budgets from different entities within a consolidation into one budget column. The underlying budget columns will automatically be hidden.

If you change the currency of the entity you are budgeting for, you need to do so before creating your budget as we do not convert it from one currency into another using exchange rates. All that happens is that the sign will change from, say, dollars to pounds. The reason for this is that we aren't able to accurately account for adjustments with an exchange rate.

So, just remember to change your entity's currency in Entity Settings before you build your budget.

Syft has options for you to assign certain permissions to different users. To do this, follow these steps: