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Budgets

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rSquared Team
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Client Admin Budgets is where budgets are created using the Budget Wizard. (Budget) Status can be edited here, as well as, on the the Budget Admin General page.

Article contents:

 

Columns

Budget - Budget title with hyperlink to the corresponding Budget Admin General page. When creating budgets via the Budget Wizard, duplicate names are disallowed.

Status

  • Active - Full availability and functionality to all assigned (i.e., editing all aspects of the budget is enabled if assigned).
  • Inactive - A soft delete. Inactive budgets are hidden throughout the application, including: Dashboard, Budget Admin sliding panel, Client Admin User Security, & reports. At any time, an Administrator may set the Status back to Active in order to resurrect the budget.
  • Locked - Additions, edits, deletes, and imports are disabled throughout the budget.
  • Administrator Only - The budget can only be accessed by users assigned the Budget Role, Project Administrator.
  • Active/Recovery Calc Locked - Disables the ability to calculated recoveries on the Rent Roll.
  • Active/Recovery Calc - Spec Only - Only calculates recoveries for speculative tenants (i.e., Rent Roll records assigned the Lease Statuses of Speculative New, Speculative Renew, Approved New, & Approved Renew) based on reforecasted expenses without affecting recoveries for existing tenants.

Type - The Budget Type is determined when the budget was created using the Budget Wizard, imported via RISE, or created by rSqaured; the "Type" is applied/assigned during the budget creation process.

Alert: All budget Types, other than LTF, should be limited to 4 year terms. If this is ignored, system calculations like percent of line calculations will drop off in the 5th year (e.g., Management Fees based on system Formulations like % of Total Revenue).

  • Actuals - The best estimated historic financial data sourced from the accounting system, normally imported via RISE and commonly used for Variances (comparison budgets for reports and on the Variance tab).
  • Base - The initial budget to which reforecast budgets will be compared. Base budgets do not display actuals.
  • Leasing - Actuals Import - Rent Roll imported from the most recent RISE data.
  • LTF - Long Term Forecasting: View the affect of leases rolling multiple times within an investment period; an extended budget used for weighted renewals and building valuations. Max Term = 15 years.

Alert: All Long Term Forecasting functionality needs to be active in your organization's environment BEFORE creating a LTF budget; it is not on by default and when active, Roles & Permissions need to updated as well in order to view and use all LTF functionality. Please submit a support ticket before attempting to create a LTF budget.

Note: There is an additional charge for the Long Term Forecasting functionality.

  • Reforecast - Used for tweaking existing assumptions, not creating them. It is normally created by copying a Base budget and has the same functionality. It does not inject actuals. Rather, it lets you make changes without impacting the initial Base budget.
  • Reforecast (Actual Overlay) - Actual non-tenant account data is injected into the reforecast at the GL account level, then leasing assumptions and major capital/expense items are reforecast in the out months.

Chart - Client Admin: Chart of Accounts

Begin & End - Define the budget's term.

Alert: All budget Types, other than LTF, should be limited to 4 year terms. If this is ignored, system calculations like percent of line calculations will drop off in the 5th year, e.g. Management Fees based on system Formulations like % of Total Revenue.

Buildings - Displays the number of buildings included in the budget.

 

Budget Wizard

Click the "Budget Wizard" button on the toolbar or right-click select from the menu; the window appears:

1. General

Copy/New:

  • Copy (w/ parameters) - Use an existing budget to create another. Budget detail and tenant data can be altered in the tabs 2 & 3.
  • Copy (exact) - Creates an exact copy of the Source Budget selected.
  • New - Create a shell of a budget from scratch. Override parameters are toggled off. Budget will not contain any expense data. Nothing will be copied from another budget.

Source Budget: All regular budget types. Excludes actual and financial budgets (source accounting system budgets via RISE). Inactive budgets are excluded; i.e., you cannot copy inactive budgets.

Budget Name: Unique budget title; duplicates are disallowed

Budget Type: List of application budget types: Base, Reforecast, Reforecast (Actual Overlay), LTF, *Custom budget type

Alert: All Long Term Forecasting functionality needs to be active in your organization's environment BEFORE creating a LTF budget; it is not on by default and when active, Roles & Permissions need to updated as well in order to view and use all LTF functionality. Please submit a support ticket before attempting to create a LTF budget.

Note: There is an additional charge for the Long Term Forecasting functionality.

Begin Month: Budget start month between 1 & 12, e.g. 1 = January, 7 = July; defaults to 1 (January)

Begin Year: Budget start year; defaults to current year.

When creating a Copy, the application will match years and add on the the overlay years, if necessary.

Term (years): Number of years; defaults to 1. 15 year max on LTF budgets

Alert: All budget Types, other than LTF, should be limited to 4 year terms. If this is ignored, system calculations like percent of line calculations will drop off in the 5th year, e.g. Management Fees based on system formulations like % of Total Revenue.

addbudgetwizard_1.JPG

 

2. Budget Detail Override

Budget Detail Override:

  • None - Copy and keep all non-tenant related budget detail from the source budget
  • Zero Base
    • Anything that is non-tenant related, meaning not driven off of the Rent Roll Tab & Tenant Tab, like expenses, miscellaneous income, etc., bring in the detail lines and convert all amounts to $0; creates a copy but then looks to the Expense, Income tabs, etc. and converts all values to zeros. This is typically done when creating the initial base budget each year. It shows the accounts that either/or had actuals posted to or were budget to which forces the responsible parties to rethink their budget rather than tweak what was previously displayed.
    • The following Input Modes will be zero based: Monthly, Annual, Quarterly, Semi-Annual, Excel Import, Distributions
    • The following Input Modes will not be overwritten: $/SF/Month, $/SF/Yr, Named Rates, % of Line Items
    • Note: Zero Base is not an option for the Non-Recurring Capital Tab. It does not affect the amounts on the NRC Tab.
  • Actual financial budgets
    • Available actual financial budgets (source accounting system budgets normally populated via RISE)
    • All tenant, market rates and named items are copied from the source budget, but the budget detail lines on the Expense Tab, Income Tab, etc. are copied from the selected actual/financial budget.

Budget Detail Amount Behavior:

  • None - Leaves the amounts exactly the same as they are in the source budget
  • Remove Historic - Drops anything prior to the new budget begin date. For example, if creating a 2016-2018 budget by copying a 2015-2017 budget, the 2015 data is dropped from the source and the 2016 data is copied into the first year of the 2016-2018 budget and then inflated appropriately in the out years. In this scenario, if you do not Remove Historic, the 2015 data in the source would be copied into the first year (2016) of the new budget.
  • Copy Year 1 Amount - Takes the year one data in the source budget and copy it into year one of the new budget despite the dates and inflate appropriately in the out years.

Non-Recurring Capital Override:

  • None - Leaves amounts exactly the same as they are in the source budget
  • Remove Historic - Drops all data prior to the start of the new budget
  • Remove All - Does not copy any items from the Non-Recurring Capital Tab

Actuals Through Date: Actuals Through Date is used in Actual Overlay budgets. It s the initial default setting and it can be updated at any time. It sets the date for all buildings in the new budget.

Default Inflation (if missing):

  • None - Do not apply an inflation to budget detail items whose current inflation assigned in the source = null (unassigned) or None; do not inflate the out years
  • Client level Inflation assigned Portfolio = All Portfolios - Apply the chosen inflation to all budget detail items whose current inflation assigned in the source = null (unassigned) or None
    • Example Client Admin level Inflation may include: CPI (Detailed variable percentages), Expense Growth %, Market Rent %.
    • Critical for out years and Long Term Forecasting
    • The Client Admin level Inflation selected will be inserted at Budget Admin level Inflation.

Delete Notes: Checked deletes notes added to budget detail lines and named items.

tab_2.PNG

 

3. Rent Roll Override

Replace Rent Roll with Actuals:

  • None - Use the source budget's details.
  • Actual leasing budgets - Available actual leasing budgets from the source accounting system budgets normally populated via RISE and displayed at the Asset Admin Rent Roll (Pipeline); the same budgets used for the Reconcile and Replacement utilities.
    • Overrides tenant details with the data from the selected actual leasing budget.
    • Includes importing named Charges and Recovery Pools if they do not exist in the source budget.

Tenant/Suite Cutoff:

  • None - Do not alter any suite or tenant end dates.
  • Selected Cutoff Date
    • Defaults to 1/1 of the new budget's Begin Year assigned on the 1. General tab.
    • Include tenants and suites that have end dates that are null or >= to the begin year.
    • All spaces and suites that end prior to this date will be ignored in the source and not copied into the new budget; any suites that end prior to the begin year will be excluded; any tenants who expire prior to the begin date will be excluded.

Tenant/Suite Cutoff Date: If above = Selected Cutoff Date, enter date.

MTM/Holdover Override:

  • None - Do not alter any month-to-month or holdover dates.
  • Selected Override Date - Extends/assigns the end date for the lease statuses of Month-to-Month and Holdover. Defaults to 12/31 of the new budget's begin year.

Alert: This can alter occupancy. Month-to-month tenants that have an end date prior to 12/31 are moved to 12/31.

MTM/Holdover End Date: If above = Selected Override Date, enter date.

Market Amount Behavior:

  • None - For tenant specific Detailed Market Items (Charges, Charge Increases, etc.) copy yearly values as they are into the new budget; e.g. Charge rates assigned in a 2015-2017 budget, copy the same values into the new 2016-2018 budget. Copy values as is, do not ignore the 2015 value in the source and move the 2016 value into the first year of the new 2016-2018 budget.
  • Remove Historic
    • Do not copy values from the source budget that are prior to the start of the new budget. e.g. Charge rates assigned in a 2015-2017 budget, drop the 2015 value in the source budget and move the 2016 value into the first year of the new 2016-2018 budget. Ignore the 2015 value in the source and move the 2016 value into the first year of the new 2016-2018 budget.
    • The last year's value in the source will be carried over to the out year(s); if the source budget's values = $12 (2015), $14 (2016), and $16 (2017), the new 2016-2018 budget's values would = $14 (2016), $16 (2017), and $16 (2018).
    • Tenants/leases that expired and/or ended prior to the start of the new budget period will be removed from the Rent Roll Tab and Suites section; i.e., legacy data will not be copied into the new budget. This can also be done with the Tenant/Suite Cutoff: (date) above.
  • Copy Year 1 Amount - Take the year one value and copy it into all years in the new budget. Continuing the example above, take the 2015 value in the source budget ($12) and copy into all years in the new budget (2016 = $12, 2017 = $12, 2018 = $12).

Default Market Inflation (if missing):

  • None - Do not apply an inflation to tenant detail items whose current inflation assigned in the source = null (unassigned) or None
  • Client level Inflation assigned Portfolio = All Portfolios - Apply the chosen inflation to all tenant detail items whose current inflation assigned in the source = null (unassigned) or None.
    • Example Client level Inflation may include: CPI (Detailed variable percentages), Expense Growth %, Market Rent %.
    • Critical for out years and LTF
    • The Client level Inflation selected will be inserted at Inflation at the Budget level.

Delete Notes: Delete notes added to the Rent Roll and Market Item expedites.

tab-3.PNG

 

4. User & Budget Statuses

Default User Budget:

  • Yes - Makes this new budget the default for all Users. Dashboard/Report Defaults Budget: (assigned at Preferences); the budget that initially loads on the Dashboard.
  • No - Do not override Users current default budget setting.

Alert: By default, all users are copied from the source budget. If you would not like all users to have access to the new/copy budget, after creating the new budget, go to Budget Admin users and use the Update users functionality to remove their access (Status = Disabled).

Initial Budget Status Override:

  • None - Do not change the current budget status assigned in the source budget.
  • Active, Locked, Administrator Only - Assign the new budget this status overriding the current status in the source budget.

Building Status Override:

  • N/A - Do not override the current building and tab statuses in the source budget.
  • Active, Locked, Administrator Only, Active/Recovery Calc Locked, Active/Recovery Calc - Spec Only - Apply this building status to each building in the newly created budget.

addbudgetwizard_4.JPG

 

5. Buildings

Building(s):

  • All - All buildings will be copied from the source budget, active and inactive. Available Buildings / Selected Buildings fields are inapplicable.
  • Selected - To copy selected buildings, move Available Buildings to Selected Buildings by double-clicking and/or using the arrows.

Note: Only active buildings are listed in the Available Buildings grid. If you want to copy active buildings and remove inactive buildings from your budget(s), use Selected and move all the buildings into the Selected Buildings field.

Enter parameters and click "Create Budget." User will receive a status email when budget creation is complete.

Note: The duration of the new/copy budget creation process is dependent on the number of buildings included; i.e., copying a budget that consists of 10 buildings can complete in seconds, while a copy of a budget with 1000 buildings may take a while to complete. Please wait for the status email before entering or reviewing the new/copied budget.

addbudgetwizard_5.JPG

 

Creating a Straight Copy

Most of the default parameters in the Budget Wizard tabs are set for a straight copy of an existing budget. When the wizard opens, Copy is the default selection.

Possible items to address:

  1. General tab
    1. Budget Type: Defaults to "Base"
    2. Begin Year: Defaults to current calendar year. Be sure to change this to your budget begin year.
    3. Term (years:) - If copying a multi-year budget, this needs to be entered; it defaults to 1.
  2. Budget Detail Override tab
    • All parameters default to "None." "Remove Historic" is an option as this should not affect a current budget; i.e.; removes detail that expired prior to the budget period. This cleans up a budget.
    • Actuals Through Date: defaults to 12/31 of the previous year. This should be addressed when copying a Reforecast w/ Actuals. The date will be updated each time actuals are updated.
  3. Rent Roll Override tab
    • All parameters default to "None." "Remove Historic" is an option as this should not affect a current budget (i.e., Leases that expired prior to the start of the budget period are removed). This cleans up the Rent Roll tab.
    • Tenant/Suite Cutoff: & Tenant/Suite Cutoff Date: If selected, defaults to 12/31 of the Begin Year assigned on the 1. General tab. This should be addressed. All suites that were ended prior to the start of the budget period will not be copied over, but rather removed/deleted. This cleans up the Suites section and Rent Roll tab.
    • MTM/Holdover Override: & MTM/Holdover End Date: If selected, defaults to 12/31 of the Begin Year assigned on the 1. General tab. Alert: This can alter occupancy. Tenants that are month-to-month and have an end date entered that are prior to 12/31 are moved to 12/31 or the manually entered date entered in this field.
  4. User & Budget Statues tab
    • Default User Budget: Defaults to "Select." Yes and No do not affect a budget, it sets a budget to all assigned users as their default (i.e., the budget that loads on the Dashboard).
    • Initial Budget Status Override: Defaults to "Active." If you would like to locked down the copy, select Locked.
    • Building Status Override: Defaults to "N/A" which leaves all Building Statuses as they are.
    • Buildings tab - Building(s): defaults to "All."

 

Setup Considerations for a New Budget

Things to think about and/or address for a newly created/copied budget:

  1. Default Years Input: & Default Inflation: If creating a new multi-year budget, these may need to be applied or adjusted on the on the Budget Admin General page
  2. Security - Any required security changes at Client Admin User Security and/or at Budget Admin Users
  3. Variances - After creating a new/copied budget, you may need to adjust the Budget Admin Variances; create new and/or adjust the Actuals settings.
  4. Recoveries - Base Years, Estimates, Calc and Base Year budgets on the Rent Roll and/or for named Recoveries

 

Long Term Forecast (LTF) Setup

Directions to Create a LTF Budget:

Click the "Budget Wizard" button on the toolbar; the window appears:

Copy/New: Copy

Source Budget: Select a budget to copy into a LTF.

Budget Name: Unique budget title. Duplicates are disallowed.

Budget Type: LTF

Begin Month: 1

Begin Year:

Term (years): 15 year max

Apply the following parameters in the Budget Wizard:

Default Inflation if missing: (on the 2. Budget Detail Override tab)

  • Apply an Inflation to Expense, Income, and other budgeting tabs that do not have one already in effect.
  • List of Active Client level Inflation. Client level Inflation must exist prior to creating the new/copied budget.
  • Upon budget creation, the applied Client level Inflation is inserted at the Budget level.

Default Market Inflation (if missing): (on the 3. Rent Roll Override tab)

  • Apply an Inflation to named charges that do not already have one in affect (named).
  • List of active Client level Inflation. Client level Inflation must exist prior to creating the new/copied budget.
  • Upon budget creation, the applied Client level Inflation is inserted at the Budget level.

Note: rSquared recommends individual Inflation(s) for market rent growth (usually regional), general CPI, expenses, taxes, and insurance.

 

Edit

Note: Edits can only be made to the Budget (name) Status, and Calc Status. To change a budget's Type, copy the budget using the Budget Wizard.

Info: Budget building populations cannot be edited here at Client Admin Budgets. Adding and removing buildings from a budget is performed at Budget Admin Buildings using the Building Import Wizard and the Delete button on the toolbar.

 

Delete

Alert: Budgets cannot be deleted, only assigned the Status, Inactive (see Inactive Budgets below). It can be assigned here at Client Admin Budgets and on the Budget Admin General page (Budget Status:).

 

Inactive Budgets

Budgets whose Status = Inactive are hidden throughout the application, including:

  1. Dashboard - "Budget Administration" box in the lower left corner and in the "Rent Roll Administration" box in the middle of the Dashboard
  2. Budgets left-hand sliding pane
  3. Client Admin User Security grid interface
  4. Reports section - Budget select drop-down on the report parameter selection page

Info: This is a soft delete. At any time, an Administrator may set the Status back to Active in order to resurrect the budget. The only place where Inactive budgets are still visible is here at Client Admin Budgets, where they may be re-activated.

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