Manuel Robalinho: Reporting system to OBZ Budget

domingo, 29 de março de 2020

Reporting system to OBZ Budget

This is a development of a reporting system for the zero base budget, using PowerBI.

To extract the data, run a report from SAP tables COSP and COSS (that have the accounting costs by cost center and account).

We have a SAP SET OBZ_TIPO_DESPESA to classify the accounts the Type of Expense
We have a SAP SET GAC_P% sets have the accounts for spending packages

Excel File layout to import into PowerBI

Empresa - Company in text field
Exercício - Year in text field (YYYY)
Centro custo - Number of cost center
Denominação - Name of cost center
Data de lançamento - Date (the system makes a single date per month, on 01 / mm / yyyy)
Real - Actual month value
Plano - Planned month
Comparativo - Actual value of the month for the comparative year
Tipo Despesa - Expense type
Pacote - Spending Package
Nome 1 - Directors (Department)
Nome 2 - Management

What is OBZ - Zero Base Budget

Zero-based budgeting is one of the budget planning methodologies that is commonly known as OBZ, this tool requires managers to justify all of their budgeted expenses, rather than a more common approach of just requiring justification for incremental changes to the budget or actual results the previous year. Thus, a manager is theoretically assumed to have a zero expenditure baseline. OBZ is a plan made from scratch, with no background so it works, everything needs to be carefully budgeted and aligned.

In reality, a manager is assumed to have a minimum amount of funding for basic department operations, above which additional funding must be justified. The intention of the process is to continually focus the financing on key business objectives and to close or reduce any activity that is no longer related to those objectives.

The basic process flow under a zero-based budget is:

Identify strategic business objectives
Create and evaluate alternative methods to achieve each goal
Assess alternative funding levels, depending on the planned performance levels to establish priorities.

The concept of tiered expenses can also be used in reverse, where you outline the specific costs and capital investment that will be incurred if you add an additional service or function. Thus, management can make discrete determinations of the exact combination of incremental cost and service for its business. This process will usually result in at least a minimum service level, which establishes a cost base below which it is impossible for a company to go, along with several service gradations above the minimum.