The Budgets feature in MarginEdge gives you a way to can track what you're spending by category, either as a percentage of sales or as a fixed amount. They are designed to help you track spending both during a period and at the end of a period.
If you haven't setup your budgets yet, here's help to do just that: How do I setup or edit Budgets?
Budgets - Viewing at a Glance
When you first log into the software, your budget section is conveniently located on the main screen just below the Sales section. The front page gives you a quick snapshot of how your budget is tracking for the location you're in.
In the upper left, you'll see how many days left in the period, and on the right is a date selector you can use to select a different pre-set range (such as "Last Period") or a custom date range.
Budgets - Drilling Down
To see how your budget is accruing over time, just click on the budget line from the home page (or go to Performace > Budget). Below is an example of the detail you'll see when viewing the budget report:
The dotted line in this case represents the target - 21% of sales for Beer, Wine, Liquor. That line reflects what you would be spending if spending exactly 21% of sales. The solid line shows how was actually spent. Tip: hover over any day on this screen to see what your actual versus budget is for the period to that point.
Below the chart is a table showing every order (expenses AND credits) as well as inventory adjustments related to the budget category(ies) you are viewing. Most restaurants count at the end of each period, and the above image represents this scenario - an adjustment is made for the count done at the end of November. If inventory went up, then there will be a credit to the budget, and if inventory went down (meaning you used more than you bought this period), there will be a further hit to the spending shown in the budget.
Note: Anytime you are viewing the budget between two inventories, whether they are a week apart or a period apart, you will have your true food cost (or BWL cost, or beverage cost, etc.)
Drilling Down - Fixed Budget
Here's an example of a budget using a fixed dollar amount - often called a 'declining budget.' This budget is an R&M budget set for $1,000 per period:
The above shows a budget of $1,000 for the period, and the spending for the period exceeded the target slightly, with total spending of $1,054 (note the amount shown on the left top of the graph.)
Using budgets with a fixed amount, you can see at any given time how your location is doing against the budget.
Budgets - Viewing Multi-Unit Groups
Now, suppose you want to see how different restaurants in your group are performing?
To view all units, from the main menu, select Performance > Budget. On this page, you will see three sets of information.
The top – “MarginEdge Deli Pasadena” - is the same budget information we see on the home page for this particular restaurant we are in. However now in the second section of information I see “Unit Rollup”. This shows me at a glance how all of my Delis are doing. It takes the individual budget categories in each store and “rolls them up” so you can see in total how they are performing. I see here things are looking pretty good, but we need to look and see what's going on Gambrills!
Note that if you have more than two restaurants in your group they will all be in order by budget performance.
You can click into any budget to see the breakdown of categories.
Why Don’t my Budgets Match my Purchases?
Budgets are a reflection of your COGS, and your purchases are not the only factor in your cost of goods. You also need to consider your inventory.
When inventories are taken, the cost of goods value shifts because inventory on hand is not a cost of goods sold (an expense) but is a good available for sale (an asset). This means inventory adjustments where the value of the inventory goes up will commensurately decrease the Cost of Goods Sold. Likewise, an inventory adjustment where the inventory value goes down will will commensurately increase the Cost of Goods Sold.
Why Don’t my Budgets and P&L Match?
The Controllable P&L references slightly different data than your Budgets.
The Controllable P&L uses product category data as it is currently set in the system. So if any product categories have changed, the costs will be allocated to the product's current category, which may differ from the category it was originally coded to when the invoice was closed.
Budgets reference product category data as it is on the closed invoices and don't take into account whether a product's category has changed since the invoice was closed.
TL:DR If a product's category changed after an invoice was closed the expense will be reflected on the P&L in the new category, but in your budgets it will show in the original category.
More tips: Understanding Your Costs with the Reports in MarginEdge
What if I'm Missing Some Data?
Two critical thing to remember about your budget calculations:
- It will only take into account CLOSED invoices and inventories
- Budget reporting shows the costs of products within a category as defined when the invoice closed. If you change a product's category after the invoice closed, that change will only be reflected moving forward and will not update any historical data as seen in the budgets. So if your Margarita Mix used to be under Liquor and now it's under Bar Consumables, your budgets will only show that cost for Bar Consumables starting on the day you made that edit.
So, please keep these in mind when viewing the data. If you have any open invoices, they won't appear here. If you haven't yet closed your inventory, that won't show up either. And if you just created that budget on February 12, you will be missing expenses from 2/1 - 2/11 because it only uses data from the day it was created and moving forward.
Also, If you are using our Closed Books feature, Budgets show expenses based on the invoice's posting date, not the original date.
If something looks amiss though, don't hesitate to reach out to help@marginedge.com and we can look into it with you.