Customise categories to suit your needs.
Using categories will allow you to break down your income and expenses into meaningful groups. They are how you group your transactions to track your spending and to budget.
Budgets Get Real is supplied standard with a comprehensive chart of categories suitable for most Personal Finance situations. No categories are provided for Business uses, because the nature of different businesses is so variable.
The following guide is intended to assist users correctly set up additional categories. It is recommended you read this guide before entering or categorise transactions. A little time now may save a lot of time later.
See also: Set & Maintain categories
Straight forward finances may not need customising.
This would apply if you intend using Budgets Get Real for managing personal finances only, and you need only submit a simple tax return. This suits salary or wages earners, who do not have other income sources such as e.g. share dividends and taxable capital gains, investment property income and self-employed income.
The standard chart of categories will work (with additions or deletions as needed.) You can proceed directly to Set + Maintain Categories.
(It may be still worthwhile to read this guide, to see if some of these ideas may be useful.)
Consider your set up carefully for more complicated finances.
This guide is for you, if you intend using Budgets Get Real for managing any form of business, or if your personal finances will require a more detailed tax return.
Your personal income sources may be varied and include salary, share dividends, taxable capital gains, investment property income, self-employed income and others etc.
You may also have some GST/BAS obligations which you need to handle.
You will need to set up extra categories specifically to handle specific business and investment transactions. You should also consider what specific information you will require, for taxation as well as other purposes.
Therefore, you should read this guide fully before proceeding to enter, or categorise transactions. A little time now will save a lot of time later.
If you are changing from another accounting or book keeping system
Congratulations on making the decision to value your time and move to a system that will help you save it !!!
You most likely will have records from a previous year, that are valuable for comparison and compliance reasons. Your category structure should ideally match that of previous years, so that you can directly compare the Profit & Loss reports prepared by Budgets Get Real with previous years.
This may allow you to provide an initial Budget to Budgets Get Real even if it is limited. Budgets Get Real provides budgeting and cash commitment reporting often not found in other systems, but some comparison is better than none.
You should add new categories to Budgets Get Real, that match those you have previously used.
Similarly, if previous BAS returns have been done for your business, you can carefully match the categories in use, and the default GST codes and rates used before.
Categories and GST
Where GST is involved, you should assign all categories a default BizCode/GST code. It is suggested that this be done, before any transactions are imported.
Thus, when imported transactions are categorised, the default GST code linked to a category is assigned to the transaction. Categorisation can occur automatically on import, or you can manually change the GST code if required
See also: Business Pack Overview
Upgrading from Personal to Bizpack
If you have entered transactions and then upgrade, a special bulk update utility is present, which allows you to set up, in bulk, the allocation of GST codes to transactions, not originally set up with Biz Code. This feature allows you to add GST codes as your business grows, and you have to register for GST.
It works even if the transactions have otherwise been categorised. This facility allows users to update at any time from the Personal Edition,to adding GST with the minimum effort. Bulk update utility can be configured by account, category, date range, as required.
Categories and multi-currency accounts
If you have accounts in several currencies, you have to define a separate set of categories for each currency .e.g. AUD- interest, EUR- interest or similarly AUD- Property income and NZ- Property Income.
You should arrange your category headers by currency, and clearly name each category to incorporate the currency symbol. This will avoid the possibility of error.
If a multiple currency situation applies to you, go to Multi-Currency accounts for further details.
Categories and Budget properties.
Major details about setting Budgets, either personal or business, and inclusion of categories in your budget, are found in the program help associated with Budget screens. Click on (?).
The major properties are set in the Modify Budget Details window. This is accessed from the Budget Components screen by clicking on the individual category.
By clicking on the Include in Budgets option you control the following:
- If checked the Category can be used for entry of Budget rules. These allow budget transactions to be generated for any Account and Job code combination.
- Disabling this option is not possible if Budget rules currently exist for the category. To disable you must delete these rule first. The operation of this option is analogous to the Inactivate option for categories (only it applies for budgets).
- All included categories are eligible for inclusion within the Cash Curve. The detailed operation of the Cash Curve is dependent on the actual Budgets Get Real Version and Build.
- Categories must be selected to be included in the Budget Monitor. Details of monitor operation are detailed below.
Categories and the Budget Monitor
The Budgets Monitor displays an overview of your budget progress for the past 4 weeks (prior to last imported transaction), or for previous months.
From this window you can easily view budget details and graphs, as well as access your transactions and modify your wallet and credit card details.
It is designed as a method for alerting you to expenses that are currently above trend. For this reason there is no attempt to present the results by financial entity. (If business and personal accounts are together, it will show both!)
The monitor analyses the actual expenses accruing to a category from all Accounts and compares it with the Budgeted transactions from all accounts for the same period. In both cases no consideration of Job codes is involved.
The Modify Budget Details window allows 2 options for display:
- Always: This option always shows the actual & budgeted results irrespective of their value. (It tends to be inefficient by proliferating the display, with information that is not immediately critical for decision making.)
- Auto: Only shows when your spending exceeds your budget or is predicted to based on a weekly trend or actual monthly value.
For more details refer to Budget Monitors
Categories and the CashCurve
Categories must be included for Budgets first, to be considered in the CashCurve.
