Use the Class budget feature to determine whether Classes are profitable, predict how many more enrolments they need to break even and create projected budgets across groups of Classes. You can compare actuals against projected income and expenses to determine whether your marketing planning needs adjustment in some areas of your course delivery.
The following is a list of common terms and definitions used within the onCourse Budget feature
Class fees paid by students enrolled in a Class
Income such as fee subsidies that are separate to enrolment income
Costs incurred in running the Class
A cost that would be incurred even if the Class does not proceed, sunk costs can also be referred to as a "fixed" cost.
A cost that is only occurred if the Class proceeds, running costs can also be referred to as a "variable" cost.
Example 40.1. How to create a Class budget
Go to the Budget section in the Class window. Here you can see a list of income and expenses for the Class, plus a summary of the Actual and Projected income and expenses.
If you have already added a tutor and added a payroll amount, you may already have a cost assigned for the tutor wage.
If you've added the tutor but don't see their wage, add their tutor wage manually. Click the + button next to the Budget heading, then click Tutor pay and select the tutor you wish to add, you need to have already assigned the tutor to the Class. You can then define the rate and any associated oncosts. Note that for the tutor wage to be automatically calculated, the tutors name has to be ticked for the sessions they are teaching in the Class timetable.
Additional expenses and income can also be added by clicking the + button and selecting the option you're after. Expenses may include items like room hire, student textbooks and advertising charges. Some expenses may be considered 'sunk', that is, they are incurred even if the Class is cancelled.
The Actual summary will show the income and expense given the current students enrolled in the Class. To set an estimate, or budget, type the number of expected students in the Projected field. The income and expenses will then be calculated accordingly.
From the Class list window, a range of budget reports are available to assist you with evaluating your program profitability. The Budget Details report shows line by line detail of the budget you have created. The Budgets report will show a summary of the actual and projected income and expense for a selection of Classes. Access them by clicking the Share button.
Additional income and wages for a Class can be recorded via the budget tab so the profitability of a Class can be accurately calculated for your actual and projected enrolments. Clicking on the + sign on the top right hand side will bring you three options:
For each item you wish to add to the budget, you can choose if the cost is calculated based on an hourly amount, a per student contact hour amount (per student per hour), per enrolment, per session or fixed. As these reference items change e.g. when another student enrols or when you add more time to the Class duration, the budget items will automatically adjust.
Expense items can be capped at maximums and minimums for the Class, have GST applied as needed, have oncosts associated with them (e.g. super, on top of wages) and be deemed as sunk costs.
A sunk cost is the cost you will incur even if the Class is cancelled, for example you may considering advertising as a sunk cost. Using sunk costs is important in a detailed budget as it will assist you in determining if it is financially viable to run a Class even if the sunk costs have not been met.
As you continue to add items to the Class budget, such as the tutor wage, room hire fees, student fee income, applicable government funding income, resourcing costs and others, the actual and projected summaries will update automatically.
If you need to delete a budget line item, simply highight the entry and the click on the trash can icon for that line. If you wish to edit a line entry, simply double click on the entry to bring up the edit window.
An important part of the budget calculations are the projected enrolment numbers you have estimated. This number is an estimate of how many students you believe will enrol in the Class and is used to calculate the figures under the 'Projected' column in the budget section.
The budget will then calculate the enrolment number required to go ahead (meet your refundable costs) and the enrolments required to profit (meet your refundable and sunk costs). This information is displayed in the budget section of a given Class.
If you do not enter any expense items for a given Class budget, the information on the number of enrolments required to make a profit that is found in the budget section will be hidden.
As well as reflecting all fee income within a given Class, the budget section allows you to track discounts. With each discount type listed as a line item within the budget.
When defining the paramaters of a given discount, you can also enter an estimated percentage of students within a given Class who are likely to take up this discount. This figure is set within the general section of the discount and is identified as the default forecast take up.
The default forecast take up of a given discount will be applied to all Classes that have that discount, but if you wish to adjust the take up percent figure on one Class, you can do this by double clicking on the discount line item within the budget section of that Class.
Once a discount has been assigned to the Class and you have entered a figure for the projected number of enrolments that are likely to be received for a given Class via the budget section, the budget will calculate the discount amount based upon the percentage of projected enrolments that are likely to take up that discount.
The dollar value of discounts given during the enrolment process will be visible in the budget section against their corresponding discount strategy.
If you give a manual discount during enrolment, the balance will be deducted from the total income field, but not visible in the discounts section of the budget section as it is not linked to a pre-exisiting discount strategy.
You can create a manual invoice for income earned through other means (e.g. government funding) and link it to a classes budget. Any invoice linked to a class will be counted toward the class income automatically, and the pre-paid fee liability rules of this class will also apply to the invoice.
To create the manual invoice, open the 'Invoice' window. This can be found by typing 'Invoices' into the main search on the Dashboard.
Once you have the invoice list view window open, do the following:
Click on the '+' symbol at the bottom right side of the window
Add information such as who the invoice is being sent to, whether you want the invoice date and due date to be a different date, whether you want to add a customer reference
Once these details have been filled in, click in the '+' symbol next to invoice lines
A sheet will appear that will let you link this invoice to a class. You will have to fill in information such as Title, Quantity, Price, Income account and, under 'Assign to Budget' what course and class code it's linked to.
Then click on Ok and Save
You will be able to see this manual invoice in the Budgets section of the selected class. It will appear under the table that says 'x custom invoice(s)' above it.