Set up a budget

A budget holds the amount you plan for each account, month by month, for one fiscal year. You can have one budget for the whole organisation per year, and one per department. Once a budget is active you can compare it with what was actually posted, and turn on budget enforcement so spending over budget warns or is blocked.

Steps

1. Open Accounts › Budgets

   In the menu on the left, select Accounts, then Budgets. The list shows each budget with its Budget Name, Department, Fiscal Year, Starting Month, Ending Month and Amount Allocated. Select Create New, then Yearly Budget for the whole organisation or Departmental Budget for one department.

   

   1. Budgets in the Accounts menu.
   2. Create New.
   3. Yearly Budget or Departmental Budget.
   4. Budget vs Actuals (step 6).
2. Fill in the budget details

   

   1. General Information: Budget Name (required), Fiscal Year and Currency. A departmental budget also asks for the Department.
   2. Fiscal Calendar: Start Month and End Month. The budget runs from the 1st of the start month to the last day of the end month, within one year.
   3. Prefill Options: start from scratch or copy last year (step 3).
   4. Budget Controls: Exclude Balance Sheet leaves balance sheet accounts out.
   5. The checkbox on each account: ticked means a credit amount (shown as negative), unticked a debit.
   6. TOTAL: type the year's amount and it's spread evenly over the months. Or type each month.
   7. Save as Draft and Activate Budget.
3. Start from last year (optional)

   Under Prefill Options, choose a Source Type:

   • None (Fresh Start): an empty grid.
   • Previous Year Actuals: what was posted in the Source Year.
   • Previous Year Budget: another budget, chosen in Source Budget.

   Enter a Global Markup % to raise (or lower) every amount, for example 10 for 10% more. Select APPLY PREFILL DATA.

4. Enter the amounts

   The Budgeting Grid lists your accounts under INCOME STATEMENT and BALANCE SHEET. Each shows its code and whether it's normally Debit or Credit. Zero Balances and Inactive Only filter the rows, and Search Account finds one.

   For each account, type the amount in TOTAL (spread evenly) or month by month.

   The AGGREGATE TOTAL row at the bottom adds every column, with debits positive and credits negative.

   

   1. Ticked: this account's amounts are credits.
   2. The account's normal balance, here Credit.
   3. AGGREGATE TOTAL: must show 0.00 in every column before you can activate.
5. Save or activate

   • Save as Draft keeps the budget without using it. A draft doesn't need to balance.
   • Activate Budget makes it the budget for the year. Every column of AGGREGATE TOTAL must be 0.00, so planned income, costs and the balancing balance sheet amounts (for example the year's profit in equity) must net to zero.

   You'll see Budget "…" created successfully. Only an active budget is used for Budget vs Actuals and for enforcement.

6. Compare with actuals

   On the Budgets list, select Budget vs Actuals. Choose the Fiscal Year and, if you like, a Department. You see Total Budget, Total Actuals and Net Variance, then each account's Budget, Actual, Variance and Var %. Green is a favourable variance, red an unfavourable one. Export downloads the report.

   

   1. Fiscal Year and Department.
   2. Total Budget, Total Actuals and Net Variance.
   3. Each account's budget, actual and variance.
   4. Export.

To start next year's budget from this one, select ⋮ on the budget, then Copy to year. Choose the year in Copy to year, an optional Uplift % and Name of the copy (optional), and select Copy budget. The copy is a draft for you to review.

Turn on budget enforcement

Budget enforcement checks bills, journals and stock purchases against the active budget before they post. It only applies to expense accounts.

1. In the menu on the left, select Settings, then Budget Enforcement.
2. Turn on Enable Budget Enforcement.
3. Under Expense Account Severity, choose for each expense account:
   • None: not checked.
   • Warning: the poster sees Budget Warning and can select Proceed Anyway.
   • Block: the poster sees Budget Limit Reached and can't post.

Each change saves straight away.

A posting is over budget when what's already posted to the account in the budget period, plus the new amount, is more than the account's budget. For a line tagged with a department that has its own active budget, the department's budget is checked too.

If something goes wrong

Message	What to do
Budget name is required	Fill in Budget Name.
Choose the department this budget is for	Pick the Department. If the list is empty, set up a Department dimension in dimensions.
Each aggregate column total must be 0.00 before you can create or update this budget	Adjust the amounts until every AGGREGATE TOTAL column is 0.00, or Save as Draft.
The Aggregate Total must be zero	As above.
A budget already exists for fiscal year …	Edit that budget instead, or choose another year.
Budget month range cannot cross into another year.	Choose a start and end month in the same year.
Budget Limit Reached	The posting takes a blocked expense account over budget. Ask a finance manager to revise the budget or the severity.