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
|
Yes
|
No
|
No
|
Funding
|
Yes
|
No
|
No
|
Budget periods:
There are three types of periods.
1. Open
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 can’t 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.
