How to Use the Budget Analysis Report
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The Budget Analysis Report is an interactive tool that lets you explore different budget scenarios.
Let’s take a look at how it works.
The Budget Analysis Report is divided into sections: Completed, In-progress, and Deferred. At the bottom, you’ll also find Actuals to Date and Projected amounts.
In Progress categories are those where you’re still recording income or expenses. All categories start there by default, but can be moved to Completed or Deferred.
A category can be marked Complete when no additional income or expenses are expected. For example, a fundraiser that has ended or HOA dues that have all been collected.
To mark a category complete, click the Complete checkbox to the right of the category. That will also move it to the Completed section.
Similarly, a category may be marked as Deferred and moved to the Deferred section when no income or expense activity has occurred, and you no longer expect any. For example, a canceled fundraiser or a project that never moved forward.
To mark a category as Deferred, click the Defer checkbox to the right of the category. That will also move it to the Deferred section.
Completed and Deferred categories can be unchecked at any time to move them back into the In Progress section.
You may also notice little information icons next to some of the categories. These indicate a category over-earned or over-spent compared to its budget.
The Actuals To Date amounts at the bottom of the report are deposits and withdrawals that have already been recorded in the bank register.
The Projected amounts are budget items that are still in progress. The Projected bank balance if on budget amount will change as categories are marked completed or deferred. It’s a key number to watch when making spending decisions.
It will also continue to change as income and expenses are recorded. It provides a realistic estimate of how much money you’ll have based on what’s still in progress and what’s already been completed or deferred. The fewer categories that remain in progress, the more accurate this number becomes.
Now let’s walk through some scenarios so you can see the Budget Analysis Report in action. We’ll use an HOA as an example, but the process works the same for any type of group.
Our HOA has received $13,000 in dues this year, but we expected to receive $14,000. Since the remaining homeowner isn’t expected to pay, let’s mark HOA Dues as Complete and see what happens to the amounts at the bottom of the report.
This is what the numbers look like before we complete the category.
After marking it complete, the Projected bank balance if on budget has decreased by $1,000. That’s because we expected to collect $14,000 but only received $13,000.
Now, let’s complete Pool Maintenance. It’s the end of the season, so there won’t be any more pool maintenance expenses this year. $1,500 was budgeted, but only $1,217 was spent.
Before we complete the category:
After the category is completed, the projected bank balance increased by $283. We expected to spend $1,500 but only spent $1,217, so the unused $283 is added back into the projected bank balance.
Next, look at Landscaping. Although the HOA overspent by $825, marking the category complete doesn’t change the Projected bank balance if on budget amount because that money has already been spent and is included in the In Bank to Date amount.
The In Bank to Date balance only changes when transactions are recorded. It does not change when categories are marked Complete or Deferred.
Now let’s see what happens when we defer a category.
Let’s say the HOA decided not to charge pet fees this year. Since there has been no income or expense activity in that category, let’s click Defer.
Before defer:
After deferring the category, the projected balance decreased by $1,000 because that income is no longer expected.
Finally, let’s defer Legal Expenses since the HOA didn’t incur any legal expenses this year.
Before we defer the category:
This time, the Projected Bank Balance increased by $1,200. The HOA budgeted $1,200 for legal expenses but didn’t spend any of it, so those unused funds are added back into the projected balance.
By marking categories Complete or Deferred as the year progresses, your projected balance becomes a more accurate reflection of the money you’ll actually have available. That helps you make better budgeting decisions for the remainder of the year.
Give it a try with your own group and see how useful the Budget Analysis Report can be.