Account Based Budget – An overview

Introduction

Any organization requires effective planning and budgeting of its expenditure and income in order to handle day-to-day operations. The component Account based budget aims at providing an effective budgeting tool by which the expenditures can be controlled and tracked and Revenues can be planned and optimized.

Budgets are defined only for open financial period or financial year. Account budget is for all the accounts except the control account type, capital account, which is fixed only on the account currency. Account budget perform validations for the natural balance of the accounts. To track the expenses and revenue we have to first define the analysis and sub analysis code. After defining an Analysis and sub analysis the same will be map it with the accounting code. One or more analysis/ sub analysis can be mapped to the account code.

Feature Highlights

• Support for defining and mapping multiple analysis, sub analysis code to account code.

• Unique Analysis code shall be defined to track income, expenses, revenue etc.

• One sub-analysis code can be mapped to more than one analysis code. But multiple sub-analysis code can be mapped to one analysis code.  For example, if  “Foreign Travel” and “Domestic Travel” are two different analysis codes and “Hotel expenses” is the multiple sub-analysis code. The sub-analysis code “Hotel Expenses” can be mapped to both “Foreign Travel” and “Domestic Travel”.)

• Provision to define the budget for the Analysis and sub analysis for the financial year and period

• Provision to display the actual amount against the budgeted amount for a particular Analysis and sub analysis code at any point in time.

• When budgets are specified for a financial year, the system checks for budget validations only for transactions posted for the specified accounts for all the periods of the financial year against the budgeted amount for that financial year.

• Provision to define control action with respect to expenses accounts only. The possible control actions are Hold and Ignore.

• Provision to copy budgeted Amount to the next financial year /period. Provision to transfer of budget to next open financial periods.

• Facility to increase or decrease the budgeted amount either on percentage basis or on flat amount basis to next financial period/year.

• Provision to consolidate Account budget.

• Carry forward unutilized account budget for next open financial period.

• Specify seasonal adaptations pattern for the Account Budgets.

List of Activities