How budget figures are counted

Budgets compares what a firm decided to spend with what its books show it spent. This page explains how, so that any figure on screen can be traced back to its entries.

A budget and its lines

A budget has a title, a period, a company and a side of the profit and loss it watches (Applies To). Its lines each name one point of the firm, an analytic account in one or more analytic plans, and a Planned amount. The plans are the dimensions: each analytic plan of the database is a column of the lines, such as Project or Departments. The plans and their accounts are set up under Accounting/Configuration/Analytic Accounting/Analytic Plans.

Where the actual amount comes from

Nobody types the Actual amount. When a vendor bill, an expense or a journal entry is posted with an analytic distribution on its lines, the books create analytic entries that carry the analytic accounts of that distribution. A budget line adds up the analytic entries that meet every one of these conditions:

The last rule matters most. A line pinned to Legal alone ignores an expense tagged with Legal and a project; a line pinned to Legal and that project counts it. This way the lines of a budget never count the same money twice. A distribution split between two departments, 60% and 40%, gives two analytic entries, and each counts on its own department's line.

Spending is stored as negative amounts on analytic entries; the budget turns it into a positive actual amount. A credit note on an expense account therefore lowers the actual amount. Depreciation entries of fixed assets count as spending; vendor bills and their analytic distribution are explained in Vendor bills and expenses.

The other figures

• Available is Planned minus Actual.
• Consumption is Actual divided by Planned.
• Period Elapsed is the share of the period's days already gone by, and Expected to Date is Planned times that share: what would have been spent by today at an even pace. Both change every day.
• A line is Over Budget (red) when Actual passes Planned, and Approaching Ceiling (orange, Near Ceiling on its form) when its consumption reaches the budget's Alert At (%) without passing the plan. A line planned at zero is never near its ceiling; it is over budget at its first counted expense.

Two budgets on the same department

Two different budgets may watch the same department: a yearly budget and an events budget for the second half, for example. Each counts the whole spending of that department in its own period. One budget, on the other hand, cannot hold two lines on the same combination, because each would claim the whole amount.

When the figures move

The figures are stored and follow the books at once: posting, changing or removing an entry updates every budget in service, superseded or closed that it touches. A Draft budget is not followed while it is written; it is read in full when it is put in service. A cancelled budget is no longer followed. A nightly job reads again the open, superseded and closed budgets whose period covers today, for entries changed outside the usual screens; see Budget automations.

The life of a budget

A revision is a copy of the budget, lines included, linked to it both ways; see Revise, close or cancel a budget.

What the app does not do

• It never warns or refuses at posting. Enforcement records how strictly a budget is meant to be kept; no entry is blocked, whatever is chosen.
• It does not budget general accounts for the financial statements: the Financial Budgets compared with the accounting reports belong to Accounting reports.
• It prints no report and sends no e-mail; the analysis is on screen, in lists, a pivot and a graph.
• It does not tag bills with departments: the analytic distribution is chosen on the bill or entry line.

Settings and access

The app has no settings page of its own. The analytic distribution on invoice and bill lines appears once Analytic Accounting is on, in the Analytics section of the Accounting settings. Each budget then carries its own options: Applies To, Enforcement, Alert At (%) and Responsible.

The Administrator access right on Accounting creates, puts in service, revises, closes and cancels budgets, and alone sees the Budget Generator. The Read-only access right sees the budgets, their lines and their entries, without the actions. Each budget belongs to one company and is seen by the users who work in it.