Monitoring a Budget Template

Toolkits
Toolkits January 16, 2022

Monitoring a Budget Template

The monitoring a budget spreadsheet template allows you to keep a detailed track of how expenditure is going compared against the forecasted or expected spend. This is an essential management task and its importance cannot be over emphasized.

One of the most effective ways to monitor a budget is to use a spreadsheet, an essential skill for any manager. This tool allows you to quickly alter figures as you receive invoices and compare the cost against each order. You will then be able to quickly identify any variances and decide if these costs can be allocated further on in the current year or moved to another cost center item or a new cost center completely.

Keeping a simple and effective method of tracking expenditure is critical to your personal success. If you fail to manage it efficiently it will be the main focus of any appraisal regardless of what else you have achieved!

Organizations no matter their size require all invoices to have a unique number that its services or purchase refer to which authorized its procurement. Efficient budget management means orders must be matched to the right invoices and any discrepancies highlighted straight away. Any differences in value must be assessed. Some will be known or expected, for example:

1) The resources cost less than planned because a more efficient way of using them was identified and reduced the quantity needed.

2) Re-work on an part of a project required scare resources to be kept on longer than planned increasing the cost of the work package.

Others will require investigation so that the situation can be assessed and the necessary action taken to keep the budget on track. This may require amendments and cuts begin made to other areas of your budget so that you don’t exceed your overall figure.

It is important to make sure that each order has a unique number assigned to it and that it is approved before being communicated to the relevant supplier. This number then follows it through it life-cycle and must be used on every invoice your receive that is related to that order. It is important to set this expectation firmly in the minds of supplier by rejecting any invoice that does not have a signed off unique order number.

The budget monitoring template provides you with a sample method of logging and monitoring orders against invoices. It enables you to identify any variances and reallocate any surpluses that have occurred quickly and easily so that you keep within your approved budget figure. This is especially important if you are responsible for several devolved budgets.

This template enables you to track both your orders and their associated invoices. It provides you with a sample method of logging and monitoring orders against invoices. You are able to track a variety of key factors critical to the monitoring process.

  1. Who raised the order
  2. A description of what was to be purchased
  3. What it was for and the order total
  4. Who approved the order to be processed and the purchase made
  5. Which cost center and line item it should be charged to
  6. The corresponding invoice number for each order
  7. Who signed off the invoice as payable and when
  8. Who the invoice was from and its total value

The final aspect of this monitoring budget template is the calculation of any variance that results from the invoice figure being different to that on its order. By identifying these variances you can quickly evaluate and reallocate any surpluses or reductions that have occurred keeping within your approved budget figure.

This is especially important if you are responsible for several devolved budgets and the template has several additional spreadsheets for different business unit (BU) budget holders so they are easy to monitor their expenditures.

The other element of budget monitoring is tracking the expenditure that occurs for each line item of the different cost centers that make up your overall budget. The monitoring template allows you to record the forecast of each item for each month and then enter the actual spend that occurred in that time frame. It then calculates the percentage variance.

There is an area set aside that enables you to make a note of any concerns or issues that you have become aware of and that relate to that line items spend. This knowledge may cause you to alter future forecasts taking into account the risks associated with issue. There are additional spreadsheets within the template that allow you to monitor the cost center spend of your budget holders in the same way. This ensures that you are on-top of all the financial aspects you are responsible for.

The monitoring of finances plays a significant role in contract management. It is becoming a major part of a managers role and having tools such as this template will enable easy monitoring of the finance elements. You may choose to have individual spreadsheets that relate to each supplier or agency you deal with that you use as part of your regular communication. This helps to ensure that you build up an open and honest working relationship with your suppliers is critical to the successful management of a budget.

As with all financial information it is essential that they are kept strictly confidential and that passwords are set for each budgetary document you create.