Budget

Budget concept is used for planning and controlling purpose. We can define budget up to maximum
60 periods. They are two types of budget.

Planning Budget: In this planning budget we just plan the expenditures but there will not be any
control over it. It's is prepared for comparing the actual with budget figures to know the variance.

Funding Budget: In this funding budget we can plan the expenditure or Revenue and also we can
keep the control on budget journal amount. Here, we required to create budget journal for defining
budget amount. It will control the actual transaction by using fund check methods(None, absolute,
Advisory).

Planning Control Budget Journal

Planning Y N N

Funding Y Y Y

Budget periods: There are three types of periods.

1. Open

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 2. Current
3. Freeze (Close)

First period in the organization is with current Status when define the budget next time you will get
only Open Status. Freeze Status means closing of the budget.

Fund Check levels: There are three types for fund check level.
None - It is for planning budget
Absolute - We cant enter amount beyond the budget amount.
Advisory It will pop up a warning message when we enter amount beyond budget amount.

Setup Steps:
1. Create Reserve for encumbrance account and expenses accounts in account segment values
2. Enable budgetary control at Ledger
3. Define Budget
4. Define Budget organization
5. Create Budget Journals
6. Query the budget journals and post
7. Create journal entry using budget account and test it.

Let us see, how to configure setup steps for funding budget

Step 1: Define Reserve for encumbrance (Ownership) A/c at account segment level.

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Step 2: Enable Budget control at ledger Level.

Navigation: Setup --> Financial --> Accounting Setup Manager--> Accounting Setup.

Query your ledger and click on Update accounting options

Go to primary ledger region and click on Update

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Now go to Advance Option window and fill budgetary control regions details like
Enable Budgetary Control
Enable Budget Journal
Enter Account code combination for Reserve for encumbrance.

Now, click on Finish and check for the Confirmation note.

Step 3: Define Budget.

Navigation: Budget --> Define --> Budget.

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Enter Budget name and description
Choose your Ledger
Status: Current

Enable check box Require budget Journals

Choose Budget periods: First and Last

Click on Open Next Year

click on "Yes"

Say "OK"

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Go to View --> Request and ensure request completed normal

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Note: Now, Query the Budget and you can see last open year field is updated.

Step 4: Define Budget organization.

Using these Budget organization form we can define name of the budget and descriptions and choose
the display sequence and Set password (Optional) and also used to mention accounts which are using
for budget planning and Budget control options.
Navigation: Budget --> Define --> Organisation.

Name your Budget Organization & Description

Choose ledger

Select Ordering segment

Choose Display Sequence

Enter Effective dates

Click on "Ranges" button

Enter Line: 1

Choose Accounts for Low and High

Type: Entered

Currency: INR
Now Status is adding

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Click on Range Assignments and Choose Accounts individually

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Close this window & Click on Budgetary Control button

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Save and close this window

Go to View --> Request and Ensure program completed normal

Step 5: Create Budget Journal.

Navigation: Budget --> Define --> Journal.

Choose Budget organization

Choose Accounting periods

Go to Work sheet mode

Choose Accounts period from and to

Select one by one account

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Click on Budget Rules button and choose rule and amount.

Say "Apply".

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Note: You have do the same for all accounts

Now click on "Create Journal" button

Enter Journal Batch name

Choose Category: Expenditures

Funds status: Required

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Click on Check Funds

Click on Reserve Funds

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Step 6: Query the Unposted budget journals and post

Navigation: Journals --> Enter.

Choose Status Posting as " Unposted" and click on find button

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See the unposted budget journal.

Review Journal

You can see:

Journal name: CJE

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Balance type: Budget
Only debit lines created in journal entry

Now, Post all unposted budget journals

Post the Journal entry

Go to View --> Request

Ensure Journal posting program completed normal

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Now, Let's test the budget concept by entering more than Planned amount.

Step 7: Create Journal entry using budget account

Navigation: Journals --> Enter

Say new Journal

Category: Expenditures

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Click on "Check funds"

System displayed a note message stating that this transaction failed fund check. It means we can't post
this journal. We need to enter amount less than the budget/Planned amount.

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Note: To Check the funds availability Navigate to Inquiry --> Funds window.

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