Set Yes in the Ledgers field in the Budget Creation/Alteration screen to set budgets for ledgers.
In the Ledger Budget screen, select a Ledger from the List of Ledgers and enter Account Name.
Enter the cost centre for a group in Cost Centre. Budgets can be created for ledger accounts pertaining to a cost centre. For example, Accountancy Fees for Finance Group. Accountancy Fees can be repeated for another cost centre such as a Branch. Select Not Applicable if the budget is not for a particular cost centre, but for the company.
In Type of Budget, select from the following two types.
| 1. | On Nett Transactions |
Select this option to monitor the transaction amounts, not the balances. Nett is net of debits and credits for the specified period. You do not expect to have a negative figure in Revenue items which reflect the transacted amounts. If there are negative figures, they are adjustments. For example, an expense account like travel always has debit entries unless there is a reversal due to error or charge to a customer.
Caution: When using Nett Transactions, the Budget Closing Balances actually get adjusted even if you have not selected this type. The figures in the Profit & Loss Account reflect the Closing Balance figures.
Note: To compare transactions against budgets, especially revenue income and expenses, select On Nett Transactions.
| 2. | On Closing Balance |
Select this option to monitor the balance of the accounts, not the transactions. For example, balances of bank accounts, balances of debtors. This is useful for Balance Sheet items.
Note: To compare closing balance figures in final statements, especially Balance Sheet items like assets and liabilities, select Closing Balances.
Enter the budget amount in the Amount field.
Apportionment of budget specified for periods more than a month
| • | Ledger Budgets are apportioned for each month on the basis of number of days. |
| • | Group Budgets do not get apportioned. Hence, Budget for Current Assets does not automatically flow to sub-groups. |
| • | Closing Balances Budget: Each month will have the same budget value except that the actual Opening Balance is taken into account. |
| • | Nett transactions Budgets specified for a period get equally apportioned over the period. |
| • | Enter the budget amount for the specific ledger. |
| • | You can set the Budget for as many ledger accounts as required and accept to save. |
| • | Use Columns and Variance options to compare budget figures with actuals in most statements. |