mSupply Budgeting - Managing expenses

Introduction

The mSupply Budgeting module was created to meet the needs of a specific client. The client on a annual basis is assigned a budget for the purchases of medicines. The budgeting module within mSupply helps to track the amounts that has already been spent. Importantly it also highlights the amount that is not spent but as been reserved to pay of pending purchase orders.

This document deals with the expense side of budgeting.

You may want to review this tutorial by working on a copy of your actual data file or by simply opening a example data file. You may need help in setting this up. Please get in touch with someone who may be able to help or with Sustainable Solutions for further guidance.

Setting up Preferences

View File > Preferences... Then navigate to the "Invoice 1" section.
The highlighted preferences must be checked for the budgeting module :
* Activate budget module
* Activate supplier payment module

Setting up accounts

View items > Show Accounts... To view all existing account codes. Theses account codes were initially designed to be used with accounting packages, but within mSupply it can be used for budgeting process as well.

By default mSupply will contain three account types :
* One expense account
* One stock account
* One income account
It is possible to add more accounts if the user feels the need. For example a medical store may wish to separate drug from consumable (such as gloves, bandages, syringes...etc) expenses. So a consumable expense account can be created.

View an account

Double click on one of the accounts to view a window similar to above. It is important that the "Account type" field is properly set. If the account heading is a expense account, then "Account type" should be set to "Expense"

In a similar manner please review the other accounts.

Assigning accounts to Items

By default all items are assigned to the three existing accounts. However it is important to review this in order to fully grasp the budgeting module.

Item > Show items.... view any item. Go to the "Misc" section. Make sure that the item's expense, income and asset account field are linked to the appropriate account headers.

Budgeting for the new Financial year

View Special > Show budgets... The new financial year has started and you may need to account for it. Imagine that the new financial year is July 09 to June 10.

Click on the "New" button to define a new financial year.

Hint : You can lock previous financial years. To do this, view the previous period and check on the "Locked" checkbox.

Define the new financial year

On a window similar to above, type in the "Description" for the new financial year and the start and end date.

For this tutorial, we will assume that the expense budget allocated for drug purchases is 50,000.

Click "OK" when you are finished.

Create a purchase order

A purchase order of value "3000" is created. The "Period" has been clearly set as this financial year.

This order has been confirmed, meaning that the supplier has been notified.

The budgeting module now assumes that 3000 has been reserved from the overall budget of 50,000.

Review your budget status

So Special > Show budgets... View your budget periods and double click on the latest financial year.

Click on the highlighted icon to view Budgets against expense.

Note that 3000 has been allocated to purchase orders. This reduces available budget to 47,000 .

Carry out a goods receipt

Do item > New Goods received.... Choose to fully receive goods from the recent purchase order.

Make sure the financial period points to the current year.

Click "OK" with out finalizing the goods received window.

Review your budget status again

View Special > Show Budgets... View the current financial year. View Budgets again expense again.

Note that the "3000" has moved from one column to the next.

Finalize the Good receive window

View the old good receive window and check the "Finalize" check box. Then click "OK".

This creates a supplier invoice.

Confirm the supplier invoice

View the automatically created supplier invoice and uncheck the "Hold" check box and click "OK" . Introduce the items to stock.

Confirm the invoice if it is not confirmed.

Review your remaining budget

You can see that you owe 3000 to a supplier. The amount 3000 is the predicted cost which was estimated during the purchase order creation stage. However your supplier informs you that there is an extra cost of 500 which was incurred as transportation cost.

How do you introduce this extra cost of 500 ?

Introducing extra cost

For the budgeting module, it is good to introduce any extra cost to the individual cost of items. So view the supplier invoice. Go to the "Price" section. Type in the 500 in the field that is highlighted.

Note the effect on the subtotal and total section. The unit cost of the items would also have increased.

The Actual increases

View the budgets and you will see that extra cost of 500 has been introduced.

Preparing for actual payments

You now decide to pay off the supplier. You are happy with the final invoiced bill of 3500.

So view the supplier invoice and check the "Finalize" check box and click "OK".

Making actual payment

For name choose the Supplier that you want to pay. The pending bills should appear when done.

Period : It is important to choose the appropriate financial year.

Payment : You should only pay the supplier what you owe. So type 3500 in the payment field. Click the "Re-distribute all" button to pay of the one invoice.
If there are more than one invoice pending, then you may choose to pay of a particular one by double click on the invoice line.

Click "OK" when you are happy.

View the budget for the last time.

You will note that the Payment column is showing 3500. You now have 46500 of the remaining budget to spend.

Print icon : see if this does anything useful.

Further points to consider

This tutorial shows that extra cost incurred during the supplying phase can be adequately handled. Here are answer to other queries that you may have :

* Can partial receipt of goods be handled ? Yes.... If the supplier supplies a big order in two installments, you should receive partial receipts in mSupply. The budgeting figures should be accurate. Half the invoice value will be shown in the "Purchase order"column the other half will be presented in the "Actual"column.

* What if the purchase order or supplier invoice is in a foreign currency ? If the purchase order is in foreign currency then cost are all converted to local currency. The budget window will show figures in local currency.

* What if I receive instant supplies without having had the opportunity to create purchase orders ? For unordered goods, you can directly create supplier invoices. Creation of purchase orders and goods receipt is not necessary.