Currently, the CostFlex Flexible Budgeting module is offered to only those clients who are using the Activity Based Costing module.
The CostFlex Flexible Budgeting module is a multi-facility, multi-year, and multi-model tool that allows the budget manager to create simple to complex flexed budgets for every line item.
Each budget model created for a fiscal year is a complete and independent database which contains all the assumptions and calculations usually compiled on several (if not dozens) of spreadsheets in the typical budget cycle. And each model is actually two separate budgets: a Static Budget and a Flexed Budget.
The Static Budget is what everyone understands as a “Budget”. However, every data element in the static budget (GL Accounts, Departments, Classes etc.) can have a statistic linked to it for use by the flexing capability.
The typical use of the flexing capability is to help explain Static Budget variances (either good or bad) in terms of the volume of work or any other statistic.
For example, if a department head was under the static budgeted expenses for supplies for the quarter, did he do a good job of managing expenses? The Flexible Budget can help answer that question by allowing the budget officer to replace the actual work volumes for the budgeted volumes. If the actual volumes were down by 50% and the supplies used were only down 25%, the answer is no!
The true power of the relational database design becomes evident in the second year that the Flexible Budgeting is used in an organization. Each budget model can be easily copied from one year to the next.