Keeping vendor spend inside the event budget
How an events business sees budget, spent and committed vendor costs side by side before the event, while over-commitment can still be fixed.
By Achekam · · 4 min read · For Events businesses in South Africa, Nigeria, Kenya
Event budgets rarely fail because of one big mistake. They leak. The sound company adds a second engineer. The caterer's final numbers come in higher than the quote. Someone books extra security after a briefing. Each decision makes sense on the day, and none of them shows up in the accounts until the invoices arrive, usually after the event, when nothing can be done about it.
The gap is between what you have spent and what you have committed to spend. Most accounting only shows the first. An events business needs to see both, weeks before the gates open.
Set the budget where the money goes
Start with a budget per expense account and period. In Achekam, a business can set a budget for each account and period and compare it with the actual figures in its ledger.
For an events business, that works best when the expense accounts follow the way you buy: venue hire, staging and sound, catering, security, marketing, staff. A single "event costs" account makes the budget useless for control, because you cannot see which line is drifting. If you run several events a year, agree with your accountant how to separate them, so each event's budget can be read on its own.
Think about periods, too. Budgets are set per account and period, and an event's costs rarely fall in one month: venue deposits are paid early, crew and catering land in the event month, and some bills trail in afterwards. Spread the budget across the periods in which you expect to commit and spend, so the comparison each month means something.
Commit through purchase orders
The second step is to make commitments visible, and the way to do that is to buy through purchase orders rather than by e-mail and handshake.
Achekam's procurement follows a clear chain. A requisition says what is needed. Once it is approved, quotations are gathered and one is selected. The purchase order is raised from that selected quotation, and the person who raised the order cannot approve it. An approved order can be cancelled with a reason, so changes of plan are recorded rather than forgotten.
Suppliers come from one supplier list, with duplicate checks by name or VAT number, so the same caterer does not appear three times under slightly different names.
What "committed" means on screen
The moment a purchase order is approved, it counts as committed spend against the budget for its expense account and period. The screen shows four figures side by side:
| Figure | What it tells you |
|---|---|
| Budget | What you planned to spend on this line |
| Spent | What has already been posted to the ledger |
| Committed | What approved orders have promised to suppliers |
| Available | What is left once spent and committed are taken off the budget |
Lines where the commitments push past the budget are flagged as over-committed. The flag does not block the purchase. In an events context that is often what you want: sometimes the extra security really is needed. But it puts the decision in front of the person approving, while there is still time to cut elsewhere.
Here is a worked example in words. The catering budget for a conference is set at the start of the planning period. The approved order for the main caterer brings committed spend close to the budget. Two weeks out, a request comes in for an extra coffee station. When the order is raised, the catering line shows as over-committed. The event manager sees the flag, agrees to drop a planned dessert course to compensate, and the line comes back within budget before a single invoice has arrived.
When the vendor's bill arrives
After the event, the invoices come in. If they were ordered properly, the matching is straightforward.
Deliveries are recorded against the purchase order line by line, including part deliveries, and a goods-received record is kept. A supplier invoice recorded against the order is matched with what was ordered and what arrived. If the price or quantity differs, the invoice is held until someone writes a resolution note: the extra hour of sound was agreed, or it was not. AccountingTools explains the wider practice in its definition of three-way matching, where accounts payable compares the supplier invoice, the purchase order and the receiving report before anything is paid.
Posting a matched invoice puts it in the ledger as expense, input VAT and trade payables, and the supplier's invoice number stops the same bill being posted twice. Once posted, it is part of the actual figures the budget is compared with.
For the smaller costs that were never ordered, supplier bills can be recorded line by line with VAT. A bill without a purchase order waits for approval before it posts. Bills can be paid in full or in parts from a chosen bank account.
Limits to know
A few things to plan around:
- Sending the order. A purchase order cannot be sent to the supplier from any screen at present, although the server can make its PDF. Send the order to the supplier yourself, and keep the order number on your correspondence.
- Nigeria and Kenya. Purchase orders are recorded in rand, because the order form sends no currency, and a supplier's VAT number must be in the South African format, so Nigerian and Kenyan VAT numbers are refused. Nigerian and Kenyan events businesses should agree with their accountant how to use procurement until these change.
Making it a habit
Set the event's budget per expense line before the first booking, and agree with your team that nothing is booked without an approved order. Then check the budget, spent, committed and available view each week until the event. The money coming in at the event itself is handled at the tills, covered in pop-up tills and floats for an event, and deposits from your own customers belong on invoices, as explained in why the till needs full payment.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
