At Budgeto, we recommend that users have two different types of budgets:
Unlocked budget: Your day-to-day budget that you maintain and update throughout the year to keep up to track with any changes or decisions that need to be made.
Locked budget: This is a budget that does not change with historical data. If you lock your budget before linking with an accounting software (QuickBooks Online or Xero), or before entering your historical data manually, then this budget will be left with no historical data. This helps to stop sharing historical data across all budgets.
When building your budgets and financial forecasts, it is important to keep one master budget at the beginning of the year that you do not want to change in anyway throughout your fiscal year. This frozen budget should remain unchanged, regardless of any historical events that occur (purchase of new assets, debt repayments, etc.).
The reason for this is that by keeping an original, unchanged copy of your first budget, you will have the ability to analyze the exact difference between the first day and last day of your fiscal year.
In order to properly use the budget lock/unlocked feature, make sure you do the following steps:
1- Check to see if your Budgeto subscription includes the "Unlimited Scenarios" option.
If not: Then you will have to upgrade your subscription to include this option before continuing. Consult the following articles from our Knowledge Base that explains how to do this with screenshots and easy to follow instructions:
2- Create your original budget. Unsure of how to start building your budget? Please consult the following article to learn how to start:
3- When you have built your original budget, make sure you "Copy" this budget and change the name. Click on the copy button besides your Budget name to start.
Include the word "Active" in the new name. This is to make a distinction between your locked budget (Original) and your unlocked budget (Active).
You should have your original budget (ex: Budget_2022_Original) and a copy of this budget (ex: Budget_2022_Active).
4- Next, open your original budget and click on the Unlock/Lock button found in the top-right screen.
You will see the color of this button switch from green to red. This indicates that locking your budget was a success.
5- That's it! You now have a locked and unlocked copy of your budget. Make sure to always work in your "Active" budget because this is the one you will maintain and update throughout the year.
You can always analyze the differences between both budgets at any point in the year.
Click here to access the Analysis module directly within the Budgeto app.
Please consult the following article from our Knowledge Base to learn more about the Analysis model:
- How to use the Analysis Module