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 earned enough revenue to cover 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 able to manage variances, such as overspending. 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.

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 "Planning" on the left menu bar and select "Budget." You'll land on the Budget dashboard. Now click on “Create new budget.” There are three main steps to building a budget:

We’ll focus on the 2nd and 3rd options in a bit more detail below.

You can choose what type of data will populate your budget. We support the following population methods:

You can create a budget at the divisional level (tracking category, class, or analysis code, depending on your accounting provider) and then compare actuals to budgeted data for each division.

For populated values, you can:

And now for a closer look at your default accounts.

You need to specify the following default accounts:

You also have the option to set up default payment schedules for Accounts Receivable and Accounts Payable by clicking on “Set up default payment schedules” at the bottom of the dialogue box. Here, you can choose the following:

If you click on either of the options, you will see that you can add a percentage amount for the initial month, one month later, two months later, and three months later. You can also insert additional periods or a bad debt row. Remember to click Save when you’re done.

Once you’ve finished setting up your Budget, you will be navigated to the Summary page, where you can see a high-level overview of key metrics, trends, and insights drawn from your budget data. You can toggle commentary on or off with the toggle next to “Show commentary” at the top right of your screen.

The Budget summary includes two graphs, an account “watch list” and a section where you can add free text. Let’s break this down:

If you click on the pencil icon at the top right corner of either graph, you can edit the data source of the data to display. Remember to save any changes you make.

The next section after the Summary is the Profit & Loss table. This table includes a number of display options, which you can find in the “Show” menu on the right-hand side of the screen. These include the following:

When creating a budget, you might want to account for certain events that will greatly impact your account values. For example, you might be planning to hire 40 more employees in the next year. If that’s the case, the amount you spend on a recruitment campaign may increase over certain periods, and the amount you spend on salaries later in the year would increase too. How can you change the account values in your budget to reflect events that could potentially occur over the budgeting period? When creating a budget on Syft, there are three ways you can change an account value:

To add an Event, click on the "Add Event” button. Every event is the result of the input lines it contains, so it’s up to you to determine what that looks like.

Let’s explore what each of these entail.

Prebuilt events include the following options:

These events are populated directly in the table under the relevant account. They are not very flexible as the input is fixed as either an amount or percentage. In addition, you cannot change the input types or add any new input lines. If you want something more customizable, we recommend custom events.

Custom events offer more flexibility, with the ability to:

Custom events allow you input the following input types:

In addition to adding events to change account values, you can also change account values by manually entering new values in the table at the account level. This will result in a “new value” event populating the relevant account.

These events work slightly differently to the prebuilt and custom ones. Here’s how:

Once you’ve created an event, you have the ability to manage it. Rename it by clicking on the event name and typing in a new name (this can even include emojis!) For more detailed edits, navigate to the cog icon next to the event name and open the Manage menu. Within this menu, you can:

Let’s take a look at how this works according to each of the sections within the “fx” menu.

Manage event enables you to edit the formula and date range for each event and change the contra account.

The contra account option can be changed between cash (which is the default bank account), credit (which is the default Accounts Receivable/Payable account) or Other (which could be any other account).

You might have added an event to your budget, assuming a 20% sales increase in the first six months. However, if an expected deal falls through, you wouldn't want to base your budget on a false assumption. In such a scenario, you might want to disregard the results of this event in your sales account. Or perhaps you would like to replace the account values with the actual sales figures. Change interaction allows you to do just that.

Change interaction empowers you to change the interaction of the event with the account on which it was created. By default, all events will be added to the accounts they’re created under. However, you can change this interaction to either “Replace account values” or “Ignore results of this event.” What does this mean?

The Reorder function allows you to move an event up or down in your budget. The effect that the events have on their respective accounts is calculated from top to bottom. So, changing the order of the events can change the value of the account they are added to.

Go to affected accounts allows you to quickly and easily navigate to any other account affected by a specific event. You can also return to the source event from all the affected accounts to see what is causing the results you see in your budget.

After the Profit & Loss table, you have the Balance Sheet table. This table functions exactly the same as the Profit and Loss table, except that it allows you to unwind an event over time. What does unwinding mean? Unwinding typically applies to deferred revenue and similar types of transactions.

To unwind an event over time, navigate to the “Manage event” menu and take a look at the date settings. You will see the option to unwind an asset/liability over time, and you can select:

Next up, you have a section for KPI Scorecards. You can choose to view any of the scorecards you have available for the entity in question by clicking on the drop-down at the top-left of the table. This selection will then populate the table with your KPI Scorecard, showing how KPIs have been impacted based on changes made to your Profit & Loss and Balance Sheet.

KPI Scorecards represent the result of account values calculated in the Profit & Loss and Balance Sheet. Thus, once again, you cannot add events to this table.

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.

You can add any of your existing connection fields to your budget by clicking on “Add a connection.” If you don’t have any already connected, you’ll be prompted to add a new connection.

In addition, you can add an event to your connection field by clicking “Add event,” selecting a connection field to link the event to, and choosing one of the following options:

To add an event, you will need to break the link to your connection. You can break the link between your budget and your connections or you can add adjustments to the field to create “Budgeted connections.” You can then manually input values.

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