Ruah is a Western Australian independent, not-for-profit community service, which has been working with vulnerable people for more than 60 years in the areas of homelessness, family and domestic violence, living with mental illness and specialist legal services. Ruah has over 250 staff across 12 locations in Perth, Geraldton and Albany.
Ruah was looking for an innovative solution to help improve accuracy, process and time associated with budgeting and forecasting. Primarily, the organisation was seeking to overcome a number of challenges around budgeting for a workforce comprising shift employees working a variety of hours with different loading rates and pay grades, and salary based employees with individual allowances.
bi5 Solutions worked closely with the Ruah team to develop an innovative pay and shift calculator solution in the Jedox EPM platform including:
- Decentralisation of budgeting and forecasting, reducing the handling work of finance
- Ability for the central budget administration to see the status of all underlying operation/department budgets quickly and easily
- Pay calculators per individual employees (shift and wage based) including on-costs
- Improved ability to calculate wage/on-cost/allowance costs for shift employees by calendar day by removing weekly averaging and cost rate assumptions
- Significant reduction in administration and time to generate annual budgets
Challenges in Ruah’s budget process
As a business that relies on human resources to deliver its services, Ruah’s main expense is salaries and wages. One of Ruah’s main challenges in its budget process was the lack of ability to easily and accurately calculate budgeted employee pay, allowances and on-costs for both shift and salaried employees.
To get an accurate total cost calculation allowing for different shift hours subject to different loadings and penalty rates (Saturday, Sunday, public holidays, afternoon/night time shifts etc) calculation was needed at a daily level, which is not practical to deliver across Ruah’s number of employees within an Excel format, which was in use at the time.
In Ruah’s spreadsheet system (where each operational manager used a standalone spreadsheet) there was no ability for a central administrator to control and update the various rates (like award, allowance, on-cost and shift loading).
As with most Excel based models, data integrity and security were also key challenges. There was a need for a budget workflow format which would open/lock data entry points by individual cost centres at different stages of the approval process, as well as the ability to enter commentary along the way to help with faster and easier review.
Ruah was also looking to improve the efficiency and time required to undertake its budget and forecast process.
How bi5 Solutions helped with a Pay & Shift Calculator
Using the Jedox platform and its multidimensional database, bi5 provided an alternative approach to Ruah’s spreadsheet format. bi5 Solutions worked closely with the Ruah team to develop an innovative shift calculator solution in the Jedox EPM platform comprising:
- Shift calculator providing results down to individual employees by day, including on-costs and allowances
- Pay calculators by individual employees including on-costs
- A three stage approval/rejection workflow process
- Multi-layered cost allocations
- Regular mid year re-forecasts incorporating the latest actuals and amended budget/forecast numbers
Ruah can now use its custom built/bespoke budget and forecasting solution in the Jedox platform for its annual budget and forecasts throughout the year.
Ruah is able to plan in a more structured way with all calculations directly linked to a final budget/forecast profit and loss statement for each cost centre, compared to its previous use of multiple spreadsheets which didn’t have strong controls or consistent handling of employees between budgets.
By entering/amending a shift or salary based employee’s weekly time roster, behind the scenes the calculator extends this to all calendar days in the relevant week or budget/forecast period, and in doing so is able to easily apply day specific shift loadings and public holiday coverage costs to determine an accurate budget of an employee’s pay, allowances and on-costs.
bi5 Solutions provided Ruah with the ability to load the latest employee data from Chris21. This is used to determine an employee’s award rate at the start of the budget period and determine when their annual increase will apply, allowing the correct award to be applied at all times.
Previously, a ‘worst case/maximum’ award had been applied due to the inability to easily apply the mid-year increment. Now, Ruah is able to report actuals more accurately against budget, and by having a more accurate employee expense budget it is able to more effectively allocate capital.
Results and Future Plans
The implementation of a pay and shift calculator has produced a number of the key results for Ruah:
- Decentralisation of budgeting and forecasting, reducing handling work of Finance
- Administration of employees: storing relevant information for calculation against both active and proposed employees
- Final budget and forecast P&L by cost centre, directly linked to various employee and global calculations and inputs
- Three stage budgeting & forecasting workflow with approvals, rejections and commentary
- Improved wage/on-cost/allowance cost calculation for shift employees by calendar day by removing weekly averaging and cost rate assumptions
- Addition of an approval/rejection workflow process
- Ability for the central budget admin to see the status of all underlying operation/department budgets quickly and easily
- Ability to easily load budget data into PowerBi for reporting purposes
- Significant reduction in time to generate annual budgets and administration required
- Positive response to, and acceptance of, new process from budget level managers
Through bi5’s implementation of an improved budgeting and forecasting solution, Ruah’s finance department has reported a significant reduction in its total budgeting time. With the budget now able to be done faster and more accurately, the process can start later meaning more current/actual data is available on which to base the budget.
The ability for the Budget Administrator to control global inputs also allows for easier updating of these inputs once the budget process has commenced, without the need for additional work from budget level managers. This can also be further enhanced to allow for more detailed and timely sensitivity and what-if analysis, with the ability to update global inputs and assumptions and quickly flow these through the full budget process.
Now that Ruah has an effective and time saving shift calculator and budget process, the next step is to develop a ‘tender calculator’. This will leverage the salary and shift calculator framework and P&L budget, and it will allow the end user to create shifts by position (with a #/FTE multiplier) rather than attaching them to existing (or proposed) employees.
This will allow the user to quickly and accurately estimate the total costs to service the program being tendered, and to quickly test multiple scenarios to quantify the risks involved. This will save tendering time and provide confidence that total employee costs are more accurately calculated, which will help Ruah to be more competitive in the tender process.