General Ledger Account Budget
The budget in money, account by account. Each line names an account, its dimensions, an amount spread across the periods of the budget period, and what to do when spending goes over it: stop the document or warn. Purchase requisitions, purchase orders, vendor invoices and journal entries are checked against it when they are saved or released.
What it is for
It holds spending to a plan. Saving the budget posts nothing. The budget acts later, on other documents:
- A journal entry, when it is saved. This covers General Entry and the entries other screens post through it, such as Bank Transactions.
- A Purchase Requisition and a Purchase Order, when they are released. See Purchase Requisition and Purchase Order.
- A Vendor Invoice, when it is released, for invoices whose Journal Indicator is F. See Vendor Invoice.
For each line of such a document, the check looks for a budget line with the same account whose period holds the document's date. A budget line with dimensions is used only for document lines with the same dimension values; a budget line with no dimensions is used for every line on that account.
Available is the period's amount, less what is already posted to the account in that period (not reversed, not rejected), less what is committed but not yet posted. When the document line is more than what is available:
| Action on the budget line | What happens |
|---|---|
| Stop | Save is refused, naming the line, the account, the amount over, the period and the budget |
| Warn | The user is asked to confirm going over the budget, and can carry on |
| Any other value | Nothing |
Whatever the action, a budget line whose Budget Status is Closed, or whose period is Closed on the Budget Period, refuses the document.
The rule people get wrong: the budget acts only on accounts it names. An account with no budget line is never checked.
Every field in plain words
Header
| Field | What it means | What to put |
|---|---|---|
| Budget | The budget's code | Required. Locked once created. Save refuses a code already used |
| Budget Model | The version | Required. From Budget Model. Locked once created |
| Budget Period | The span and its periods | Required. From Budget Period. Locked once created. Every line gets one breakup line per period |
| Budget Prepared By, Budget Approved By | Who prepared and approved it | Optional. Recorded only |
| Notes | Free text | Optional |
| Currency | The budget's currency | Required. New lines take it |
| Transaction Amount | The total of the lines | Worked out on Save |
| Local Amount, Reporting Amount | Totals in local and reporting currency | Not worked out for this budget in this version: they stay at zero |
Budget Lines
| Field | What it means | What to put |
|---|---|---|
| Line # | Line number | Automatic |
| Account | The general ledger account | Required |
| Name | Its name | Automatic |
| Currency | The line currency | From the header. Required |
| Transaction Amount | The budget for the whole span | Required. Typing it spreads it equally over the periods; change the breakup if the months differ |
| Carry forward, Carry forward Percentage | Recorded only | The percentage can be typed only when Carry forward is ticked, and is spread over the periods. Nothing carries any amount forward today |
| Period | Opens the breakup | One line per period: Period, Date From, Date To and the amount for that period |
| Action | What to do when spending goes over | Required. Stop or Warn |
| Budget Status | Open or closed | Required. Closed refuses every document on this line |
| Line Text | Narration | Optional |
Each line has its own financial dimensions, such as cost centre or department.
The period breakup
| Field | What it means | What to put |
|---|---|---|
| Period, Date From, Date To | The period | From the Budget Period |
| Carry forward, Carry forward Percentage | Recorded only | |
| Transaction Amount | The budget for that period | The breakup must add up to the line's Transaction Amount |
How to configure it
- One budget per model and period. Lines can be imported from a spreadsheet: without period columns each line is spread equally over the periods; with columns for the breakup, the breakup is taken as given.
- To stop spending in a month already past, close that period on the Budget Period. To stop it for one account, set its Budget Status to Closed.
- Default values per company come from Budget Setting.
Scenarios
- A services company caps travel per department. One line per department: account Travel, the department as dimension, the yearly amount, Action Stop. A purchase requisition or journal that takes travel over the month's amount is refused.
- A school only wants a warning. Action Warn: the user sees the overspend and confirms.
What it is connected to
- Budget Model, Budget Period, Budget Setting.
- Purchase Requisition and Purchase Order in Purchasing; Vendor Invoice in Payables; General Entry in General ledger.
- Procure to pay - the purchase process whose documents are checked against the budget.
- Budget lists - Budget, Budget Lines, Budget vs Actual.
If something looks wrong
- "Budget Model cannot be empty", "Budget Period cannot be empty". Fill them before Create.
- "Budget Lines Data cannot be Empty". Add at least one line.
- "Line ID: ... - Account cannot be empty". Pick an account on the line.
- "Line ID: ... Period is not defined." The line has no breakup: the Budget Period has no period lines. Add periods to the Budget Period, then add the line again.
- "Line ID: ... - ... should be equal to Total Amount defined in Period Breakup." The breakup does not add up to the line amount.
- "Same General Ledger Account Budget - ... already exists". Use a new Budget code.
- On another document: "Line ID: ... - Account ... exceeds budget funds available by ... for period ... of Ledger Budget ...". The line has Action Stop and the document goes over. Raise the budget, move it between periods, or reduce the document.
- On another document: "Line ID: ... - Account ... - Budget is now closed for period ... of Ledger Budget ...". That period is Closed on the Budget Period.
- On another document: "Line ID: ... - Account ... - Budget is now closed for Ledger Budget ...". The budget line's Budget Status is Closed.
- Spending is not checked at all. The account has no budget line, the document's date is outside every period, or the dimensions on the budget line differ from the document line's.