Using Wave for Departmental Budgeting / Expense Accounting

davidshqdavidshq Member Posts: 5

Hi Folks,

I lead an IT Department and each year operate within a fixed budget. I'd like to do some further analysis on my expenditures and to be able to see over time how my actual expenses are comparing to the budget. I'm wondering if anyone has thoughts on whether Wave would work well for this purpose and if so how I should configure it?

My thought at the moment is that I could create a number of accounts - one for each budget item and set their starting balances to be the budget amount for that item.

Then I could create another account into which I would add the expenses and link them to the budgeted account above...

That is about as far as I've gotten.

Thanks,
Dave

Comments

  • hgomezchgomezc Member Posts: 18 ✭✭

    Hello,

    I'm a similar situation where I need to keep track or even limit the expenses under several categories, and I'm trying to figure out the best way to handle this using wave.

    So far, my best solution is very much what you've described but I'm still experimenting because I have other requirements to meet.

    I think the approach you're considering will give you a very good result. I'll comment here if I come up something different.

    Best regards
    H

  • AlexiaAlexia Member Posts: 3,314 ✭✭✭✭

    Hi, @davidshq!

    That's a really interesting use for Wave, and I'm curious to see where this discussion goes. I think I would treat different budget categories as bank accounts to best keep track of how much money is left for a given budget item. And then you can just use them to pay expenses within Wave without having to make journal entries. I can't say whether it's the best option or not, but it's the one that comes to mind.

    Thoughts?

  • DieloTopacioDieloTopacio Member Posts: 4

    Forecast and Planning (or Budget as it’s commonly known) are not usually part of regular accounting systems (even the big ones). Forecast and Plan are usually managed either manually or on a separate system but that doesn’t mean it can’t be within the same system. It just have to be separate from the general ledger. Wave should just add it if they can accomodate instead of forcing it by creating categories in the chart of account, which is not an acceptable accounting principle. A forecast and planning tool in a simple manner is like a replicate of your financial statement with theoretical future figures. It’s more of a future looking financial statement unlike an accounting tool/system which is backward looking. You wouldn’t want your financial statements to look distorted.

    The best way for an accounting system/tool can help you keep track of your budget is if you book your transactions/expenses in a timely manner and periodically review your financial statements.

  • hgomezchgomezc Member Posts: 18 ✭✭

    I agree with what @DieloTopacio says regarding the Accounting.

    As a business owner, it is clear to me that Accounting best practices not always align with the visibility that business manager needs to run the business on a daily basis. That's why I let my accountant use his system of choice to keep track of things as he needs to, and I use "my own" system like Wave or other, to keep things how I need to see them.

  • ManiMani Member Posts: 82 ✭✭✭

    @hgomezc That's an interesting approach. We typically would not recommend you have two separate systems for you and your accountant. That's a lot of additional and duplicate effort, with two "system of record". What you're speaking to is the difference between "Management Accounting" (what's going on in my business) and "Financial Accounting" (how do I plan for taxes, efficient structuring, etc.) As much as possible, one system should be used for all bookkeeping and management accounting, and if necessary, data should then be exported from that single system of record to other software for tax management or budgeting.

    @DieloTopacio is quite right that the feature set is distinct for forecasting and budgeting. Other software vendors that do both have essentially spent enormous effort building a spreadsheet with some convenience features. However, in our opinion, they're all hard to use and likely have very low usage. We currently don't intend to do this and it does not live on our roadmap. If we start hearing from many customers (here and elsewhere) that we're looking at this the wrong way, we're happy to take those learnings and rethink our approach.

    I will say that we have some ideas around using arbitrary tagging of transactions to help create additional metadata that would show up in CSV exports. Do any of you feel that tagging projects or types of budgetary expenses could help if you could export to a spreadsheet and use pivot tables, VLookUps or other spreadsheet features to analyze for your needs?

  • KenjKenj Member Posts: 27

    Hi, it will be great if Wave can come out with user described grouping/tagging/hashtag In this case can be project, sites, departments. For example, I would like to see profitability of projects, but it makes no sense to create so many income/COGS categories. Sometimes we need some privacy of data of how we classify groupings especially when we open up collaboration with outsourced parties.

    Appreciate future release will allow us to reclassify. And even move transactions out of these various INCOME/COGS accounts we've created.

  • AlexiaAlexia Member Posts: 3,314 ✭✭✭✭

    Thank you for your feedback, @Kenj!

  • davidshqdavidshq Member Posts: 5

    @Alexia - Creating separate accounts is an interesting way to handle it...I might give that a try.

    @Mani - I do think arbitrary tagging would be great!

  • AlexiaAlexia Member Posts: 3,314 ✭✭✭✭

    Let me know how it works for you, @davidshq!

  • KeyboardSmashKeyboardSmash Member Posts: 7

    @davidshq I am just looking into this. I would like to track my networking spending with a specific group over the coming year to see spend and return. I was disappointed there was no tagging option! Adding separate accounts feels like the overall account balance would be a bit messy for me - have you tried it yet?

  • davidshqdavidshq Member Posts: 5

    @KeyboardSmash - I haven't yet! If you get to it before me, let me know how it goes...I'm still evaluating a few other options besides Wave.

  • KeyboardSmashKeyboardSmash Member Posts: 7

    @davidshq likewise. Seeing accountant next month so may hold off until that discussion happens.

  • RebeccaBRebeccaB Member Posts: 0

    @Mani said:

    >

    I will say that we have some ideas around using arbitrary tagging of transactions to help create additional metadata that would show up in CSV exports. Do any of you feel that tagging projects or types of budgetary expenses could help if you could export to a spreadsheet and use pivot tables, VLookUps or other spreadsheet features to analyze for your needs?

    I would love to have a facility for tagging. I currently use Wave for our property portfolio and it would be great to compare each property’s Performance from time to time. So having them in a csv file where I could use a filter would be useful.

    Would be equally useful to use a tag to filter in a report.

  • ViennaMikeViennaMike Member Posts: 1

    Add me to those who would like to see a budgeting and budget variance reporting capability, But if not on your roadmap, so be it. Just easier to be all in one tool, rather than separate spreadsheets.

    But definitely add me to those who would like to see tagging. Strict hierarchical structures have their roles, but tagging and the ability to multi-tag and cross tag is also vary useful. For myself, I know it would be very handy for bookkeeping for our Home Owners Association.

  • KenHowardKenHoward Member Posts: 1

    I agree. Would really like to have Budget and Variance.

  • fastbikefastbike Member Posts: 4

    I've just registered with Wave as I was told it could be used for budget / cashflow variance as well as accounting. Disappointed that the budget / variance functionality has been removed.

  • Fantastic4Fantastic4 Member Posts: 3

    I'm a bit confused by the logic of separate systems for budgeting / cashflow variance. It seems some very basic budgeting features wouldn't be that hard to implement, and the real problem using a separate method is that you are now using a separate tool that requires extra steps to populate the same numbers you've already entered in your accounting tool, and you can't just click a button to see real time updates without re-doing this process each time. Every additional step you have to take is prone to errors.
    I can envision how something like this could work, so it's perplexing why it's not a common feature set for all accounting tools? It could be automated in its reporting instead of requiring more brainwork to make it happen ... ? Aren't we all trying to eliminate duplication of entries?

  • AlexLAlexL Administrator Posts: 2,869 admin

    Hi all, as we continue to try to improve and put our full efforts into features associated with the small business toolset, we've decided not to expand into personal finance management, but instead
    continue to keep our scopes on small business accounting.

  • fchildressfchildress Member Posts: 2

    @alexlewiszarkos appreciate the update, but I'm curious as to how you've come to the conclusion that budgeting is a "personal finance management" practice and not a "small business accounting" practice.

    I am a bookkeeper for multiple small businesses and all budget and want financial reports that compare results to budget.

    Would love to hear other thoughts and ideas but confused by the thought that budgeting isn't for small businesses....

  • MyronMyron Member Posts: 143 admin

    Hi @fchildress , thank you for sharing your thoughts. I do understand your concerns around the removal of the budgeting feature. In building the new version of Wave, we noticed that some of the old features, such as budgeting, would not run on the new platform. Because only a small group of customers used the budgeting tool on a regular basis, we made the difficult decision to retire the feature.

    edited August 1, 2019
  • davidshqdavidshq Member Posts: 5

    Hi @Myron and @alexlewiszarkos,

    I share some of @fchildress' confusion.

    1. In @alexlewiszarkos response he notes that Wave is not expanding into personal finance management, but as @fchildress notes, this thread has never been about personal finance management but about corporate/organizational budgeting (something FP&A'ish).
    2. In @Myron response he notes that some features, such as budgeting, are going away due to not working with the new releases. This adds to my confusion, as I'm not sure what budgeting functionality that currently exists is being removed, since this thread was largely about adding such functionality to Wave.

    I apologize if I'm just being dense. :)

    On another note, if Wave really isn't going to offer support for this kind of budgeting for organizations in the software I'd request that Wave integrate with and recommend a budgeting solution. For example, Intuit's QuickBooks App Store has a number of third party integrations that provide budgeting / forecasting / etc. functionality:
    https://apps.intuit.com/app/apps/home

    Thanks!
    Dave

  • MyronMyron Member Posts: 143 admin

    Hi @davidshq , thanks for the response! @alexlewiszarkos and I are referring to the personal budgeting feature that was available in the legacy version of Wave. Personal budgets and investments were features that were available in the Personal profile of older Wave accounts. Due to compatibility issues with the newer version of Wave and the fact that only a small group of customers used those tools regularly, we decided to retire those features. In terms of integrating with a budgeting software, if there is one that you would like to use, I would suggest checking Zapier to see if there is a Wave integration to it through Zapier. To search for software that integrate with Wave through Zapier, please see: https://zapier.com/apps/wave/integrations

  • davidshqdavidshq Member Posts: 5

    Thanks, that explanation is helpful @Myron! Unfortunately, I'm not aware of any inexpensive, high quality, business budgeting software - which is why I was hoping to see it included in Wave. :)

  • jtnatolijtnatoli Member Posts: 1

    Xero has very good budgeting features. I'd love to see it included in Wave.

  • CrissaCrissa Member Posts: 2

    Hi- I'm really interested in trying to figure out a work-around to the lack of budgeting in the program. I found this discussion while searching because I was thinking along the same lines as the original poster. I am the treasurer for a large scouting troop. I don't need to budget every single category- however, each unit (age group) within the troop has a budget/ spending limit. I was thinking that I could create a liability account for each unit with the total amount that they are allowed to spend and then pay from that as they spend it. Would that work to track it without affecting my overall account balance? I welcome any thoughts. I am very new to bookkeeping/ accounting and don't want to waste time trying something that's a terrible idea. Thank you!

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