1. Standard objective: budget management on a cashout basis, without CAPEX or prepaid expenses. This is the minimum level required to manage an IT budget.

2. Intermediate objective : cashout budget management with CAPEX. This level is required to obtain OPEX/CAPEX indicators or when you need to indicate to the Finance Department what expenditure can be capitalised, in what proportion and over what period.

3. Advanced objective : P&L budget management. This level is required if you are objective about respecting and optimising a P&L budget. It should be noted that dual management of Cashout and P&L is often required in order to control cash flow on the one hand and optimise the company's results on the other. Management of prepaid expenses becomes necessary if you want to have very precise control "down to the euro". In fact, prepaid expenses only concern a part of the budget (maintenance and subscriptions) and once set up tend to become stable over time. The P&L budget with and without prepaid expense Management then becomes almost identical.
   

Abraxio operating principles

Financial views

1. Cashout : standard "costs invoiced / costs disbursed" budget view. It takes into account all cash spent by a company during a Fiscal year, combining current and capital expenditure

1. P&L (Profit & Loss) : financial view of costs from an 'income statement' perspective. This option becomes available if you activate CAPEX Management; it is imposed if you activate Prepaid Expense Management. The P&L view contains :

1. Expenditure excluding prepaid expenses and not capitalised

2. The proportion of prepaid expenses impacting the Fiscal year
   

3. Depreciation charges for CAPEX impacting the Fiscal year, and only that Fiscal year :

Note : for subsequent Fiscal years, these depreciation charges are not automatically filled in by Abraxio. In fact, they are usually provided by the Finance Department, either globally or in detail. For subsequent Fiscal years, it is therefore necessary to retrieve these depreciation charges and fill them in manually in Abraxio. Several methods are possible:

1. Detailed on each Project/Activity (not recommended as these project lines will remain until depreciation charges end)
   
2. Semi-detailed on a "Depreciation charges" Sub-budget on which one line per Project / Activity will be created.
   
3. Global: on a single line that groups together all the depreciation charges for all the previous year's projects/activities (recommended method).
   

1. To summarize :
   
1. Budget View (Cashout) = OPEX + CAPEX
   

1. OPEX : non-capitalisable part of an expense and CAPEX : capitalisable part.

2. P&L View = OPEX P&L + Depreciation charges

1. OPEX P&L being the non-capitalisable part of an expense made during the year.
   

Expenses types	Budget View (Cashout)	P&L View
OPEX	Yes	Yes If prepaid expense, portion impacting Fiscal year
CAPEX	Yes	No
Depreciation charges	No	Yes

If you do not activate fixed asset management, your budgets and expenses will be considered as not fixed and the OPEX and CAPEX indicators will not be calculated.

Fixed assetsmanagement

1. In the Abraxio Finance module configuration, you can activate fixed assets management.
   

2. At the level of each budget line, you define if the line is capitalizable or not. If yes, you also define a % to be capitalised, a duration of capitalisation and a commissioning date.
   

3. At the level of each invoice or internal cost, you also define whether the line can be capitalised and, if so, the additional information. By standard, the policy defined at budget line level will be applied to the invoices and internal costs that are charged to it. 
   

1. If you have activated CAPEX management and the P&L financial view, a new P&L tab is displayed for each budget line.
   

2. This tab shows :
   

1. Automatically calculates the OPEX portion of the budget line
   

2. Automatic calculation of new depreciation charges generated in the Fiscal year
   

3. The ability to enter depreciation charges arising from CAPEX carried out in previous Fiscal years
   

Management of prepaid expenses

1. In the Abraxio Finance module configuration, you can activate the management of prepaid expenses (CCA).
   

2. At the level of each budget line, you define if the line is or is not a prepaid expense. If it is, you also define the duration of the smoothing period and the day of the month on which the smoothing period begins. In the cash flow budget schedule, you position the amounts to be smoothed over the defined period.
   

By definition, an expense cannot be both a prepaid expense and a CAPEX. You will therefore not be able to activate the management of fixed assets and prepaid expenses on the same budget line.

If you are not subject to VAT, the VAT will be entered in the CAPEX section and will therefore be capitalizable. Make sure you configure this correctly.

Edit

1. In the budget tab, the cashout budget is defined.
   

1. In the P&L tab, you will find :

1. The P&L total line equal to : OPEX + new depreciation charges calculated + previous depreciation charges
   

2. The calculated OPEX portion
   

3. The new depreciation charges calculated
   

4. Previous depreciation charges that you can enter manually
   

5. The CAPEX policy applied is shown below.
   

Depreciation charges management is only available in the Finance module.

Calculation of new depreciation charges

Basic Data

1. Capitalisation rate (% capitalisable): generally 100%, but in exceptional cases this rate may vary if part of the expenditure is not capitalisable.
   

2. CAPEX period: generally between 3 and 7 years, depending on the life of the product to which the expenditure relates
   

3. Start-up date: for a Project, the production start-up date is used, and for an equipment purchase, the date when the equipment goes online.
   

New depreciation charges are calculated automatically and only for one Fiscal year.

If during your Fiscal year you capitalize an expense with depreciation over several years. Abraxio will automatically calculate the depreciation charges for the Fiscal year. In subsequent years, you will have to manually fill in the depreciation charges in the line "Previous depreciation charges". This information is generally provided by the Finance Department at the beginning of the Fiscal year.

Activities

1. In the accounts, there will be a CAPEX of €3000 in January and another of €3000 in July. In Abraxio, you need to fill in the average commissioning date, i.e. April.
   

2. The amount to be capitalised is €6000.
   

3. The monthly depreciation charges are €6000 / 60 months = €100 / month.
   

4. The depreciation charges calculated will therefore be €100/month from April to December, i.e. €900.
   

In an Activity, the amount considered in the calculation of depreciation charges is the total amount of the budget line for the fiscal year.

Projects

A Project budget line must be linked to one and only one commissioning.  The CAPEX policy must therefore represent the production start-up date. If you have several releases, it is recommended that you use different budget lines.

Example: my company's Fiscal years run from January to December. I start a Project in July 2020 and deliver it on 1st October 2021. The Project budget line shows a total expenditure of €60,000 Excl. VAT, which I am capitalising over 5 years.

1. The commissioning date is 01/10/2021.
   

2. The amount to be capitalised is €60,000.
   

3. The monthly depreciation charges are €60,000 / 60 months = €1,000 / month.
   

4. The depreciation charges calculated for Fiscal year 2020 will be €0.
   

5. The depreciation charges calculated for the Fiscal year 2021 will be €1,000/month from October 2021 to December 2021, i.e. €3,000.
   

In a Project, the amount considered in the calculation of depreciation charges is the total amount of the budget line for the project.

Use of prepaid expenses

Configuration

If you are subject to VAT, the VAT is recorded at the time of the expense and not smoothed.
If you are not subject to VAT, VAT is included in prepaid expenses and smoothed over the defined period.

Edit

In the Finance module, in the detailed view, open a budget line:


1. In the budget tab, the cashout budget is defined.
   

             

1. In most cases, the "calculated" mode will be appropriate.
   

2. The "Manual" mode will make sense in the following situations:
   

1. 1st Fiscal year managed in Abraxio: to enter prepaid expenses for previous Fiscal years (not managed) in Abraxio, activate the "Manual" mode for previous Fiscal years to enter the amounts.
   

2. Budget line with several expenses with different smoothing periods: this is particularly the case for subscriptions that are prorated when changes are made during subscription.
   

Management of prepaid expenses is only available in the Finance module.

Automatic calculation of prepaid expenses

Principle

1. Duration: expressed in months. 12 for annual maintenance, for example.
   

2. Day of the month: by standard, the 1st day of the month. Allows you to start smoothing during the month, thereby improving the accuracy of prepaid expense calculations.
   

Example 1: quarterly maintenance

       

1. The Expenses Incl. VAT line shows unsmoothed expenses, i.e. VAT. There is therefore €600 of VAT per quarterly Deadline.
   

2. Each Deadline of €3,000 Excl. VAT is smoothed over 3 months. In 2022, the new prepaid expenses line shows the expenses incurred during the Fiscal year and smoothed from February to December 2022.

       

1. In 2023, the previous prepaid expense line shows the last month smoothed, corresponding to the expenditure in November 2022.      

1. Detailed budget table :
   

1. Configure your views to display the desired columns

2. Use the following button to switch between cashout and P&L views
   

2. Detail of a budget line
   

3. Excel export of the budget
   

4. Dashboard Finance/ Flash reports suivi