Budget Tree: Example

Suppose that one company—North Serpent Company, with stores in the mountainous areas of California and Nevada—sells skis and snowboards and offers rental services. The company's stores are too small to function as branches, so the Branch Accounting feature is disabled on the Enable/Disable Features (CS100000) form.

Defining the Account Structure of the Company

The organizational structure of the company is reflected in the subaccounts. In MYOB Advanced, if the Subaccounts feature is enabled on the Enable/Disable Features (CS100000) form, subaccounts are used with accounts to virtually split accounts into more specific accounts for detailed tracking and reporting. In our example, the subaccounts have the following structure (see Subaccounts: Example of Planning of Subaccount Identifiers):

First segment: Company store (point of sale):
- CA (California store)
- NV (Nevada store)
- 00 (non-specific to a store)
Second segment: Profit center
- RENT (rentals)
- SALE (sales)
- 0000 (non-specific to a profit center)
Third segment: Product type
- SK (skis)
- SB (snowboards)
- 00 (non-specific)

Configuring a Budget Structure

Suppose the North Serpent Company prepares the budgets with the following major budget articles:

Revenue from Sales
Revenue from Rentals
COGS
Other Expenses

These major budget articles will be represented as nodes on the Budget Configuration (GL302010) form, which you use to build a budget tree for the company. Also, each major node contains subnodes for which account and subaccount masks are specified. Leaves are defined by an account-subaccount pair for each subnode. You can see a schematic example of the configured budget tree in the table below.

Table 1. Budget Tree
Node	Subarticles (Nodes)	Subarticles (Leaves)	Account Mask	Subaccount Mask	Account	Subaccount
Sales
	Sales–California		4100	CA-SALE-??
		Sales–California–Skis			4100	CA-SALE-SK
		Sales–California–Snowboards			4100	CA-SALE-SB
	Sales–Nevada		4100	NV-SALE-??
		Sales–Nevada–Skis			4100	NV-SALE-SK
		Sales–Nevada–Snowboards			4100	NV-SALE-SB
Rentals
	Rentals–California		4500	CA-RENT-??
		Rentals–California–Skis			4500	CA-RENT-SK
		Rentals–California–Snowboards			4500	CA-RENT-SB
	Rentals–Nevada		4500	NV-RENT-??
		Rentals–Nevada–Skis			4500	NV-RENT-SK
		Rentals–Nevada–Snowboards			4500	NV-RENT-SB
COGS
	COGS–Skis		5000	??-SALE-SK
		COGS–Nevada–Skis			5000	NV-SALE-SK
		COGS–California–Skis			5000	CA-SALE-SK
	COGS–Snowboards		5000	??-SALE-SB
		COGS–Nevada–Snowboards			5000	NV-SALE-SB
		COGS–California–Snowboards			5000	CA-SALE-SB
Other Expenses
	Repairs and Maintenance		55??	??-????-??
		Repairs and Maintenance–Nevada	5570	NV-????-?? (Aggregation)	5570	NV-0000-00
		Repairs and Maintenance–California	5580	CA-????-?? (Aggregation)	5580	CA-0000-00

Defining Account-Subaccount Pairs and Masks

For the major node, account and subaccount masks are not specified because these nodes are divided into multiple nodes. For each subnode, the account and subaccount masks are specified. These masks specify the group of budget articles that can be added under the node. The articles with the account and subaccount that match the masks are automatically placed under the node when you preload articles for a budget on the Budgets (GL302010) form.

The articles with values in all four columns are leaf articles with initial aggregation over the data defined by these masks. The expenses recorded to the Repairs and Maintenance account for each store last year, although summed to significant amounts, cannot help in predicting the expenses for the budget year, but the their sum can. The company can plan the amounts based on the previous year's data with a specific coefficient whose value is based on the percentage of old equipment and other related factors. The company plans these amounts as lump sums without details; to do this, the company uses budget articles with aggregation. The articles have the account-subaccount pairs specified and the subaccount masks for aggregating the amounts.