Understanding budget lines
Budget lines reflect your current operational chart of accounts. To create your profit and loss (P&L) statement in Budgeting, budget lines must be created in all levels including the organization level, revenue center level, job levels, and so on. The income and expense line items are assigned either monetary and/or percentage amounts. The ultimate goal of Budgeting is to calculate total value for every line in the budget.
About Budget Line Data
Budget line data is the result of the calculations configured in the Cost Structure & Results tab of the Edit Budget Line dialog box
For example, to calculate the total monetary, the following formula might be used:
Total monetary amount = Units x Rate x Factor + Fixed Currency Amount
The type of data includes:
Units
Units represent how many "things" the line will use in the calculation. For example, KBIs (rooms or covers) and hours are represented by units. Units are typically generated during the forecasting process.
Rate
Rates are the monetary amounts by which the units are multiplied to calculate revenue or expense. For example, if you are selling your rooms in January for $110.00, that is the rate.
Factor
Factors are additional multipliers that you can use to adjust for user-defined reasons.
Note: Custom notes are often added for more information.
Fixed Dollars
Fixed dollars are additional amounts that are not affected by the number of units. For example, your telephone bill may be $500/month. The fixed dollar amount is the $500/month.
Monetary amount
Monetary amount is the value multiplied by a percentage to calculate currency amount that is applied to the line. This data type typically includes Percent of Base, Percent of Hours (hours), and Percent of Labor (costs and hours). As an example of Percent of Base, a travel agent commission would be room revenue (base amount) multiplied by a percentage to yield an expected expense for travel agent commissions.
About Budget Line Types
The various budget line types configure Budgeting to match your property's needs.
Budget line types include:
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—Total lines
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—Total lines
Total lines are used to group and organize lines and to build the budget structure. Total lines comprise and summarize other lines, which can include detail lines and other total lines. Total lines define the math of the budget tree. For example, Rooms is the sum of Room Revenue and Room Expenses.
Note: Total line can contain all lines except divider lines and the overall total line.
Note: Notes about math for total lines appears in the configuration.
Calculated lines
Calculated lines are used to add or subtract budget lines. For example, if you want the Total Revenue line to calculate the sum of all revenue lines in the budget, you create a formula that designates which budget lines should be added together to give you the total. These lines define important numbers in the budgeting process, like GOP and EBITA.
Note: Calculated lines might occasionally be referred to as marker lines.
Fixed lines
Fixed lines are used to enter fixed costs such as mortgage payments and fixed revenues such as those derived from leased space.
KBI lines
A key business indicator (KBI) is a factor that impacts business at your property or is some factor you want to track. KBIs are values, measured in major units (such as covers, rooms, coin in, guests, and so on), that indicate the activity of your business. RMS uses KBIs to create forecast data and labor standards. For example, if you have a budget line called Cleaning Supplies that needs to be affected by total rooms, the line would be linked to the Total Rooms KBI during configuration.
Note: A KBI line is a variable expense. For example, Cleaning Supplies are usually Total Occupied Rooms multiplied by an Average Rate to yield the Total Expense for Cleaning Supplies.
Job lines
Job lines are functional groups within a department that are used to define specific jobs. Job lines are used to compute the labor portion of expenses. Adding a job detail line ties it to the division and department under which that the job code operates. It is linked to a job, and the number of hours is linked to labor standards.
A job is calculated as Reg Hour × Regular Rate + OT Hours x OT Rate.
Note: Review your labor standards before configuring Job lines.
Market Segment lines
A market segment represents a category of rooms and guests. There are four types of groups for market segments: Contract, Group, Transient, and Casino. Market segment lines are a summary of the individual marketing segments that were previously forecast day-by-day. When you create a segment, you define the group in which that segment is included. Market segment lines behave in the same way as KBI lines.
Note: A market segment can be used as a way of segmenting your rooms business.
Revenue Center lines
A revenue center is any business outlet (except Rooms) that generates revenue. Revenue centers are defined by periods that are associated with KBIs. Typical revenue centers are restaurants, bars, lounges, and so on. Revenue centers enable you to gather guest information about a specific outlet for the purpose of generating a forecast. Revenue Center lines behave exactly like KBI lines. Typically these lines are attached to revenue lines only. They are commonly used for meal periods in F & B outlets, golf rounds, or car parking.
Tip: Business units that track guests are tracked as revenue center lines.
Revenue center lines are also lines in which you can track both units and average rates. If you cannot track a unit value, then the line is not a revenue center. For example, a gift shop is not a revenue center.
Percent of Base lines
Percent of Base lines calculate their total monetary amount based on a percentage of monetary value from another line(s). For example, the food cost of sales is usually budgeted as a percentage of food revenue.
Percent of Hours lines
Percent of Hours lines are used to allocate percentages of job lines to subcategories of labor, such as company and leased labor. This feature enables you to budget separately for company employees and leased laborers and to configure the appropriate rates of pay for each job line. For example, during peak season, a hotel might employ both company employees and contractors as housekeepers. The controller must budget a percentage of regular and overtime hours and wages for each category. The controller can now create two Percent of Hours budget lines: one for company employees and one for contractors.
Percent of Labor lines
Percent of Labor lines enable you to configure new budget lines that allow a percentage of Hours and Costs to be sourced from a Job line. Percent of Labor lines are similar to Percent of Base lines; however, Percent of Labor lines use all items for the percentage.
Divider Lines
Divider lines are used to insert blank lines into the budget for grouping purposes. Divider lines do not contain data. They can only be added to the top-level P&L group lines.
Note: On the Edit Structure screen, divider lines are indicated by a dark letter D icon ( 
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