Master the Art of Innovative Budgeting and Planning


Bryan: Okay. So good afternoon, everybody. I hope you can hear me well. My name is Bryan. I am a solution engineer at Prophix. I’m gonna be your host today for this webinar, partner with Encore Business. So a little background about myself. I’m a solution engineer. I first started off my career in finance and accounting. I was in the procurement side of things. So, for some of you who might be on the line, I understand what you’re going through. You’re always trying to improve your business processes, trying to buy a new software, trying to make life easier for yourself.

From there, I became a implementation consultant for Prophix. So I have a pretty good understanding of how Prophix can help you, our software can help you enhance your day-to-day and benefit your processes. So, for the next 45 minutes, I’m going to paint the picture on how Prophix can potentially maximize your corporate objectives. So let’s dive right into it.

So to begin, I wanna share some of the typical challenges that I’ve seen when I was a consultant. When I first started meeting and started understanding the processes and my clients, I noticed that everyone uses spreadsheet. That’s the number one thing that people use. And with these spreadsheets, there’s different data sources. Data are coming from everywhere. So they’ll have… In addition to that, there are people involved. So if you just take a simple spreadsheet, right, it’s a blank slate, but then now, it’s gone… Complexity has increased in double and triple because there’s different data source. There’s different calculations involved, different versions of the spreadsheet, different people involved. So more people are touching and manipulating these numbers. And on these spreadsheets, are these numbers valid? Half the time, some of my clients would spend a lot of their time, actually, to validate these numbers. Is the formula correct? Is in the right cell, right column, and so on and so forth? So a lot of sleepless nights just trying to validate these numbers and it’s tough.

And as your company grows, you’re gonna have more data sources, more people involved, more versions. Where are these files sitting? Are they sitting on your shared drive, your inbox, you know, on your desk, everywhere? So wouldn’t it be good to have a single spot, a single source of truth that helps you understand what’s happening with your business and where and how you wanna take it?

So with Prophix, what we do is we take your various data sources, your general ledger, your revenue data, some of the stuff that you’re very familiar with, your HR, some Excel, right, and any other operational systems. We support and integrate it over hundreds of different GL systems. We take that information, we pull it or import it into Prophix, and from there, we create models that are specifically tailored to your needs.

Once that’s done, you can start analyzing, inputting, and sharing that information across the organization. We’re a Microsoft shop. We can also integrate with your PowerPoint. So you can take the information from Prophix and you can create decks for your C-suites or meetings. We can easily export them into PDF or onto Excel. Or simply, you can consume that information directly in Prophix. And I’m gonna show you how afterwards.

All the data that is brought into Prophix is at the aggregate level. So if you ever need to understand what a certain data is trying to explain or you need more of the underlying information of that aggregation, you can always drill back directly into the transactions so you can get a better understanding of what the number is, and what does it entail, basically.

So, for today’s agenda, what I plan to do is I’ve broken it down into four spots, four pieces. First, we’re going to analyze the data. And once we understand, have a good understanding of what the data means, and it’s a sustainable trend of what’s happening within the organization, we can start planning. We can take that information, tweak it, and then three months down the road, I’m going to review that budgeted data against my actuals and see how we’re performing against the plan. And then once that’s completed, I’m going to package all the information into a neat, little report. And then I can share it off to my C-suites, my managers at different levels in the organization so they can understand what’s happening, and show them how they, kind of, take the company to the next level that they want.

So let me pull it up. Let’s jump into Prophix. One second. So to start off, Prophix is a web-based application. For every user, the first thing that you’re going to do or you can… It’s a web-based application, so the first screen that you’re going to see once you’ve logged into Prophix is the dashboard. You can simply enter in your credentials. That’s gonna bring you in. We also do support single sign on. So what that means is you can take your same credential that you’re used to, you can pass it through the browser and authenticate. Once that’s done, like I said, we’re gonna land directly into our dashboard. All the information that you see here, right, the look, the feel, the colors, the configuration, all of that can be configured to whatever you like.

I, for example, have set up this dashboard to show me some revenue variants over here, and then it’s showing me the different quarters, my gross margins, some costs. I got some favorites nailed down here. And then as we go down a little further, I have some tasks. I’ll explain a little further later on what this tasks entails and these favorites. But for now, let’s just focus on the dashboard.

So I’ve created a single dashboard, right? I could roll this dashboard throughout to the whole entire organization. And depending on who’s consuming the information, our security will ensure that each user will see only their information that you provision them to see. So you no longer need to create multiple dashboards or multiple iteration of this. And then all you have to do is create a template and then our security will take care of it for you. Now, you might be thinking, “Okay, that’s just one.” But Prophix can also enable you to create multiple dashboards for different groups within your organization, so for example, operations, IT, finance, specific dashboard for their needs.

Once you’ve created, you can also limit to what they can and can’t see using our security. What kind of data can we display in Prophix? You can display any type of data that you’d like to pull in and review. So, presently, you might have one system, right, for your HR, then you have your GL, and you have someone, you’re in an Excel spreadsheet, and then some, literally, papers on your desk. What the benefit of Prophix is you can pull all that information within Prophix and set up a dashboard in this case, and it will showcase you everything that you would like to know. So, once again, you have a single source of information and you no longer need to disperse or have multiple systems, spend your time across different sources. Everything’s at your fingertips.

I have here my revenue variance. It’s showing me actual budget and my variance for the first three quarters. When the fourth quarter comes up, I’m going to… System will automatically pull in the information of my actuals and then it will automatically refresh my dashboard and show me the information. So what I currently see here is there is a positive variance coming from Q1, not Q1, Q3. So Q1 is a bit lagging, but Q2 and Q3, we’re doing better and better.

So let’s try to understand where this variance is coming from and why, right? I’m going to drill in into my third quarter. And now I see the underlying information within my quarters. Anywhere in Prophix is very interactive and dynamic. I wanted to see what happened in my Q3 and I just double-click and I drill down into my Q3. Now that I have July, August, September, it’s telling me that I still have a very strong quarter, there’s forward momentum. But that still doesn’t explain to me why we’re doing well. Let’s take a look if we can get a little bit more information.

So what I did is I pulled the report that is linked to my chart. And now it’s showing me the revenue variance for Q3 for my various customers by channels, so my wholesale, retail distributor, and all of that. Every report in Prophix can be transformed into a template. So now, you no longer need to create multiple reports for different departments. You can create a single template and send it out throughout the whole entire organization.

So I have my revenue variance report. I’ve created it. So it’s showing me my various territories and by time. If I want to limit my North American users within, once again, our security manager would be at play here, they would limit to… They can see only United States and Canada. And as I select my territory, it automatically updates the information. If it was Eurasia, I would see only Asia or Africa. So you create a template, meaning…and you send it out throughout your entire organization and security will limit them to what they can and can’t see.

So back to our total territory, keep in mind, similar to our dashboard, every report, the look, the feel, the color, you can totally configure it to the way you like. I’ve set it up with a little bit of blue color schemes, but sky’s the limit for you. So as I glance over, I see a favorable variance coming from my wholesale. My wholesale channel, it seems like it’s pushing majority of my variance. And I want to know a little bit further as to what’s happening. So I know that Q3 was producing the most positive favorable variance, and then now I know that it’s coming from my wholesale. That’s great, but I still need a little bit more. I’m not happy with that answer and I wanna know what is actually in wholesale that’s causing this increase in the organization. And can I rely on this information?

So let’s keep going. Let’s analyze this information a little further. So what you see here now is our ad-hoc view. It is the underlying data from our report that we stripped away all font and formatting. So you only see the information. And now you can slice and dice the information in different manner. What I normally like to tell some of my clients is that you could think of it as a pivot table on steroids. You don’t need to understand how to create pivot tables. You don’t need to understand how to code them, how to set them up. All you need to know is how you want to analyze the information and what you need to analyze.

So wholesale was causing this increase. So let’s dig a little further and see what within wholesale caused this increase. So now I can see. I drilled into wholesale and it’s showcasing me my four customers under wholesale. The first thing that pops up is there’s no data from artscaping budget. All right. So it looks like it wasn’t budgeted for. That technically could be the reason. But why is that? I wanna take a look at what’s happening with all the product and where they bought from for the whole year. So I’m going to take a look at all the product they’ve purchased for the whole year. So there’s actually a gap in the first quarter. There’s no actuals for that. And I can see Q4 is empty. Once again, we’re at the end, we just started Q4. So once the information is readily available, it’ll automatically populate and then we can see the rest of Q4.

What product? So let’s take a look at what product they’re buying from us. And then, I wanna see what territory we’re selling to. I’m gonna clean this up a little. And now, we have a focused view on all the products we’ve sold to Artscape and which area for the whole year. If I want to add a little conditional formatting similar to Excel, I want to point out all value greater than a million. So the majority of my sales is coming out of the United States. A lot is weighted on product line A. and if I want to drill in a little further, majority is coming from Midwest. And then as I go down to the lowest level, I can see that we have someone called Jacqueline Lo, which is our sales rep. And she’s pushing a lot of sales to Artscape, and then they’re coming out of the Midwest. So that’s telling me that’s good. But that doesn’t explain to me why there’s no budgeted value. And there’s a gap in Q1.

So what I can do is now I can drill into the lowest level, like I’ve mentioned before. Sorry, I meant drill into my transactional level. And this is a drill-across view. And once I’ve set it up to show different headings, month, account, Customer ID, Customer Name, Customer Since, and I can also see the invoices that we produced to Artscape, I can easily pull that up.

So as I’m reviewing this view, I can see Jacqueline, right, since it’s her client. And I can also see that there’s a Customer Since and they are a new customer since April of this year. So with that information in mind, that makes sense, they’re a new customer so we don’t have any information for Q1. I’m going to speak to Jacqueline to see if this new… Are we going to continuously sell to this new customer in this upcoming year, and does she have any confidence that they will also buy, so I can add this new customer as part of my plan?

If I want to save this view, I can easily save this view so I can send this over to Jacqueline and then have a conversation with her. If I want to download into Excel, I can easily do so.

So to quickly recap, what we did is we saw a variance coming from our revenue. We’re doing really well. There’s forward momentum coming from Q3, and I wanted to know why. I dug a little further. I found that it’s coming from our wholesale channel and explaining to me that there’s a new customer, as I dig in a little further. And it’s coming from our sales rep who’s pushing a lot of sales from the Midwest region to Artscape.

So all of this, this whole analysis, was done within Prophix. You no longer need to get out of the system, find your data somewhere else, compile them. All of that was done within Prophix. This is gonna save your organization time, costs, IT, you don’t have to maintain multiple systems, licenses. It’s gonna streamline a lot of process at the end.

So after speaking to Jacqueline, she said, “Brian, I’m pretty confident that I can teach some to Artscape and we can add them as a lineup in our upcoming budget.” I’m very happy to hear that. I can now start budgeting for my upcoming year.

So, as I bring your attention down here, we have a list of tasks. In Prophix, you can set up a workflow. And then once that’s setup, you can configure it to a whole array of responsibility for the different users. The following tasks are all the ones that I’m responsible for, that my manager or administrator assigned them to me. In terms of task, you can have just data entry, right? Very simple. You can set up reminders, as in “to dos.” You can also set up processes, ensure that they can be contingent on a task, another task once that’s set up, like pre-populating your forecast, your budget, a template.

For each task, there’s an owner, there’s a co-owner, meaning if I’m not available and I’m out of the office, someone else can also step in. There’s an approver. And there’s also rules for each task, meaning if the task is do, I can automatically decline it. I can automatically approve it. So the option, and it’s totally up to you…you can set it up to configure it any way you like. And so we can begin into our operating expense planning.

Okay. So what I pulled up is, I was assigned a task to plan out our operating expense. Once again, every report you see within Prophix, you can configure the look and feel to exactly the way you’d like. I set it up to show me my accounts in the rows, and my time in the columns.

I’ve also pre-populated my template with my forecast information. So that’s gonna give me a starting point. And at the same time, I’ve added… I will also be planning two years out. So on the second year, I’m gonna be planning from a yearly level. And I’ve added my previous year’s actual and my 9-plus-3 forecasts as references.

So depending on how you set up your budget, we support a blank slate. You can set it up as a zero-based budgeting. You can pre-populate with your forecast information like I have or you can also pre-populate with your previous year actuals or two-year actuals. So the choice is entirely up to you. You’ll notice that there’s different shades of colors on different cells. What happens is on the blue cells, you can make any entry, and then on the yellow cell, I’m letting my user know that those are the cells that they need to input information into. For here, for the payroll cost, it is empty. Later on, we’re going to be planning at a deeper level. And then I’m gonna show you that further on in the demonstration here.

So, let’s start budgeting the information. So let’s focus our attention right around here, okay? I know that my marketing costs or my trade show cost is going to be a lot more in January. And so I’m going to simply enter in 1,500. As I enter in 1,500, you can see that this number will automatically update to reflect the newly added data point. So this total, the sum of marketing, you’ll notice that it’s not just a formula within this template or this report. Wherever you’ll get the sum of marketing, this calculation is centrally managed in the back, meaning that once the administrators configure at one time, you’ll always have the same value across the entire organization. So whenever you pull up trade shows for January within your budget, you’ll always get the same amount. So that means you’ll no longer have to worry about if the number is valid anymore. As long as the rules are properly configured, you’re good to go.

So the next up is… You know, I’m pretty good with this January amount. Let’s say for marketing agencies, I know that it’s just slightly more than last year on our forecast. I’m gonna put 7,000. So what happened? I put in a data point at the aggregate level. So Prophix is smart enough to know that it’s asking you actually, “What do you want me to do with it? Do you want me to take this 7,000 and then spread it evenly? Or do you want me to spread on existing trend?” which is the seasonality in this case. Or we can choose to spread based on an account, such as some of the ones that I’ve pre-populated, like your FTE, headcount, square footage, utilization. You can also spread on any other accounts that is readily available within your GL or other statistical accounts and the results of the statistical drivers that you have in the system or in your GL.

For the purpose of this, I’m going to spread based on seasonality. And there we go. We have 7,000 across the board, and it took that value and it spread accordingly based on the previous seasonality. Sometimes we don’t know what is the exact number, but you know it’s a percentage of another value. If I know that maybe my web presence…it is 10% more than last year, I can use Prophix as a scratch pad to enter in my budget. And we also support a whole array of your typical Excel formulas too, so if you want to add a little bit more complexity within your calculations. And now it’s gonna give me my bump. And in this case, I’m gonna spread evenly. And we have the 10% increase spread evenly across the whole year.

So this concept of spreading, right, we take a value in aggregate level. And what we did is it automatically spread based on the 12 months. It is not just for time, you can take that value, you can put it at your marketing level, so the total marketing, you can put into total. And it will automatically spread the value down to the underlying departments within marketing. So product marketing, content marketing, field marketing, you can spread all of that downwards. So I can put my value at the top, at the total level, and then it’ll automatically spread it down. So you can do that for a department, entity, time, location, geography, right?

So we’ve inputted information into our template. And sometimes we wanna let our approver or manager why I made such a change to the value so they don’t come back to us and require more information. I’m gonna be proactive and I’m gonna tell them, “Hey, I bumped up the cost for next year and this is why.”

Similar to Excel, you can add comments. So now, I have little a flag. It’s telling me that I have a comment for this data. The difference between our comments and something like an Excel comment is that in Excel, a comment is attached to the spreadsheet versus in Prophix, the comment is attached to the data. So wherever you pull trade shows for January, you’ll always get the same comments following it. So picture this, the budget is completed and then two years down the road, you wanna revert back or review why the value was 1,500. Well, you pull up a report showing you your budgets for the different years. So you have your budget previous to your budget, and then you see your 1,500 there. Right away, you’ll see the explanation because there was a trade show in Vegas. Simple like that. So now, you don’t have to dig back and then to pull the proper sheet. It is all within Prophix already.

Other times, when you enter information in Prophix and your manager goes… A very simple example is something that happened to one of my clients. They updated information but their manager said, “No, this is the same number that I sent out to you.” Well, you’ll no longer have that discussion because with Prophix, you have data history. And what is this… This is showing you that… The history, literally, it’s the data history. You have who, what, how the number was updated or inputted. This will tell you what it was based on, a spread, an input, an import. So if your manager will require you to explain that or show you proof or maybe someone didn’t update a number and you wanna just double check if the number was different from last year or if there was an update to it. Now, everything can be tracked and you can easily pull this up and then have a discussion if you need to.

So now you have accountability across. I’ve done my work, and it’s made it really easy. And if somebody has an updated information, you can just use it as a double check, too. So there’s a lot of ways of making things, life very simple once you’ve implemented Prophix.

Another aspect, when my clients are budgeting, is they don’t just budget at the account level. They want details. Detail is very important to them. So we also can accommodate budgeting at a more detailed level. So here, with this little check mark, it’s telling me that for advertising costs, we are required to enter in supporting schedules. So the similar concept, you have your months across. And now you have different type of advertising costs, and the justification, and some more commentary that each person can add to it. So from here, people can add a little more detail to their accounts.

All right. Now, let’s do some budgeting for our payroll costs. I’m gonna go back to my dashboard and I’m gonna pull up my personnel. So, what you see here is a schedule of all my employees within our product marketing department. All this information was pulled in from our HR hire system. These are the different attributes that I’ve added from our system. But we do support a whole array of attributes not limited to these. And using these attributes, we can generate, now, calculations, results, calculations, and then to generate these total earnings, benefit, annual increase, and this will push to the associated accounts within the system, and that’s gonna update my template, my operating expense budgeting template.

If I want to just quickly update someone’s salary, right, for this upcoming year, if I want to change someone’s position, all of these can be done within just a few clicks. So she’s going to be a director. And if I wanna add a new employee, she’s going to be a VP. She’s going to start in April, based out of New York, okay, so she’s making 1.25 million. That’s wonderful. We mentioned that she’s starting in April of 2010. So that means the data should attack…the results of these calculations should only start in April. And there we go. It is doing that, that’s great. So taking into the factor of time, right, we only wanna start budgeting in April. So this whole concept of this calculation and time, it’s gonna be reflected throughout all the other calculation benefits, increases, payroll taxes, all that it’s gonna take into account.

So I’m going to push this information on to my template. I’m going to update the report. And there you go. We have employee salaries, payroll, all the different, various payroll costs coming from our schedule was pushed onto here. So we went from a more detailed level, and then now we have more account level. I’m pretty content with my values. I’m gonna submit for approval. Now, our workflow, when you submit something to your approvers, it also can be used as a communication tool. What this means is, once I hit send, he’s going to get a message. And then, if you choose to…once you review it, you can either hit approve and then provide commentary or you can reject and provide commentary so you know what’s happening. This is gonna land directly into his inbox and he’s gonna get a link. Or once he logs into Prophix, it will automatically pop up under his task and reminding him to complete it. So now that I’ve done my planning, I’m pretty happy with the way that it’s set up and pictured. So that’s great.

So the next step, picture this. Three months down the road, I need to take a look at how we are against plan. So I’m gonna take a look at my forecast. So what we have here is another report that’s been created as a template, very similar to everything that I’ve shared with you today, the look and the feel. You know, I have accounts in my rows and my time in my column here. All of that is fully configurable to whatever way you like. Blue, you can enter in this information. We’re going… This is plan in a more detail level, so employee level. Here, we have our actuals, so we can’t make any modification, which is good, because that’s already set and we don’t wanna touch that. And so we have all these fields in yellow, similar to the previous budgeted template, data entry, spreading, scratch padding, all of that applies here.

But one thing I would like to show you how you can… It’s a great benefit to you is that you have your actuals and you have your forecasts. If you know that trade show is still a very low amount and you know it’s gonna go up in terms of costs, I want to make it more realistic. So I’m going to bump it up. So it’s about 5, I wanna bump it up to 16. And if you keep your attention here across on trade shows, especially here, where my mouse is, once again, we…inputting information in aggregate level, they wanna know… The system’s like, “Hey, what do you want me to do?” We’re going to just spread based on existing data. Actually, in this case, I’ll just spread evenly. As you can see, the actuals was left untouched and the rest here was updated, which is exactly what we want. What happened is I know that my value is going to increase and I’ve inputted it into my total and that’s the result I want to see. And what the system is doing, it is taking the 15,000 minus your actuals, and we’re gonna make it up for the next upcoming nine months. So there you go. Simple as that.

You can also create multiple versions. When you’re setting up your forecasts, you might wanna review the different information or set up a scenario analysis or sensitivity analysis and see how it’ll affect using different drivers. So within a few clicks, you can have…. I’ve pre-populated my forecast here, but yes, you can easily do so by…set that up within Prophix.

So we’ve done our forecasts and what’s next or what’s left is I wanna package all that information so I can share that with upper management. Some of the reports that you can create within Prophix like a income statement, you can compare your actuals, your budget, your month-to-date, year-to-date. You can add some comments here. Once again, the comments will follow the data wherever it goes, similar to what I showed you before. You can set up a balance sheet by different entities, different departments. And once you’ve created all those reports, you can set up a binder. And this binder will have your reports, plus we can import or pull in a Word document, like a cover page. You can provide a management discussion here. You can also add a PDF and what you’re doing and then put that all within Prophix. And then we can distribute to a user list or a group.

So, at the end, the final solution would look like this. We have a cover page, some management discussion. We have our statements. We have some other reports with some comments, some cash flow statements. So these are just some of the examples of what can be created within Prophix.

So there you go. Everything from the beginning till the end was done within Prophix. I was able to analyze and then I was able to budget and plan, review my performance, and share this information across the entire organization.

So, on that note, that’s it for me. Do you guys have any questions on your end?

Melissa: Anyone has questions, they can put them into the question pane right now. Maybe give it a minute or so. I don’t see anything coming in. So I think we could probably wrap it up.

Bryan: Okay. So thank you, everyone, for attending. If you have any questions, feel free to reach out. Have a nice rest of your afternoon.

Melissa: Thanks, Bryan.

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