The materials budget will help you plan for your material expenses. It will also be used to calculate how much overhead you're likely to recover from the materials you install/sell.
In this video, you'll learn how to:
- Build a forecast for material expenses
- Set realistic material expense forecasts based on your materials ratio history (the % of your revenue spent on materials, year over year)
Creating Your Material BudgetThe purpose of this article is just to give you a quick overview of the Materials tab within your LMN Budget.
- Most companies can leave the Materials Tax section at 0% because sales taxes paid on materials are already included in their accounting totals for material spending last year. Only use the material tax section at the top if:
- You pay sales tax on all materials AND
- The cost of sales taxes are not included in your forecast amounts.
- Similar to your Sales Forecast, we recommend breaking your Materials down by Division Type.
- The key number in the materials budget is the Forecast which will indicate your Forecast for the budget year. Your Previous numbers would be from the year prior.