Updated Budgeting Documentation

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Basawaraj Savalagi
2018-11-09 11:06:08 +05:30
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# Budgeting # Budgeting
In ERPNext, you can set and manage Budgets against a specific Account. This is useful when, for example, you are doing online sales. You have a budget for search ads, and you want ERPNext to stop or warn you from over spending, based on that budget. In ERPNext, you can set and manage budgets against a cost center or a project. This is useful in controlling your expenses.
Budgets are also great for planning purposes. When you are making plans for the next financial year, you would typically target a revenue based on which you would set your expenses. Setting a budget will ensure that your expenses do not get out of hand, at any point, as per your plans. For example, if you are doing online sales, you can set a budget for search ads, and configure ERPNext to stop or warn you from over spending beyond the budget set.
In ERPNext, budget against an Account is defined via Cost Center. Following are the steps to define a Budget. Budgets are also great for planning purposes. When you are making plans for the next financial year, you would typically target a revenue based on which you would set your expenses. Setting a budget will ensure that your expenses do not get out of hand, at any point.
###Cost Center ### Cost Center
To create new Cost Center, go to: To create new Cost Center, go to:
@@ -15,40 +15,61 @@ To create new Cost Center, go to:
<img class="screenshot" alt="Budget" src="{{docs_base_url}}/assets/img/accounts/budgeting-cost-center.png"> <img class="screenshot" alt="Budget" src="{{docs_base_url}}/assets/img/accounts/budgeting-cost-center.png">
###Budgeting ### Project
####Step 1: Create a new Budget To create new Project, go to:
> Projects > project > Add New Project
<img class="screenshot" alt="Budget" src="{{docs_base_url}}/assets/img/accounts/new_project.png">
### Setting a budget
#### Step 1: Create a new Budget
To define a Budget, go to: To define a Budget, go to:
> Accounts > Budget and Cost Center > Budget > New > Accounts > Budget and Cost Center > Budget > New
####Step 2: Select Cost Center #### Step 2: Select Cost Center or Project
In the Budget form, select a Cost Center. Budgets can be defined against any Cost Center whether it is a Group / Leaf node in the Chart of Cost Centers. In the Budget form, select a Cost Center or a Project. Budgets can be defined against any Cost Center, whether it is a Group / Leaf node in the Chart of Cost Centers.
####Step 3: Select Account #### Step 3: Select Account
In the Budgets table, select Income / Expense account for which Budget is to be defined. In the Budgets table, select Income / Expense account for which budget is to be defined.
<img class="screenshot" alt="Budget" src="{{docs_base_url}}/assets/img/accounts/budget-account.png"> <img class="screenshot" alt="Budget" src="{{docs_base_url}}/assets/img/accounts/budget-account.png">
####Step 4: Monthly Distribution #### Step 4: Monthly Distribution
If you have seasonal business, you can also define a Monthly Distribution record, to distribute the budget between months. If you don't set the monthly distribution, ERPNext will calculate the budget on yearly If you have seasonal business, you can also define a Monthly Distribution record, to distribute the budget between months. If you don't set the monthly distribution, ERPNext will calculate the budget on yearly
basis or in equal proportion for every month. basis or in equal proportion for every month.
<img class="screenshot" alt="Monthly Distribution" src="{{docs_base_url}}/assets/img/accounts/monthly-budget-distribution.png"> <img class="screenshot" alt="Monthly Distribution" src="{{docs_base_url}}/assets/img/accounts/monthly-budget-distribution.png">
####Step 5: Alert on Budget #### Step 5: Control Actions(Alerts)
While setting budget, you can also define the actions when expenses will exceed the allocated budget for a period. You can set separate action for monthly and annual budgets. There are 3 types of actions: Stop, Warn and Ignore. If Stop, system will not allow to book expenses more than allocated budget. In Case of Warn, it will just warn the user that expenses has been exceeded from the allocated budget. And Ignore will do nothing. Control actions can be triggered while material request is being submitted, purchase order is being submitted or while actual expense is being posted(through a journal entry or a purchase invoice).
There are three types of control actions.
* Stop: This will not allow users to submit the transaction.
* Warn: This will show a warning message but lets the user to submit the transaction.
* Ignore: This will neither prevent the user from submitting transaction nor show an error message.
<img class="screenshot" alt="Control Actions" src="{{docs_base_url}}/assets/img/accounts/control-action.png">
You can set separate action for monthly and annual budgets.
<img class="screenshot" alt="Monthly Distribution" src="{{docs_base_url}}/assets/img/accounts/budget-warning.png"> <img class="screenshot" alt="Monthly Distribution" src="{{docs_base_url}}/assets/img/accounts/budget-warning.png">
####Budget Variance Report ####Budget Variance Report
At any point of time, user can check Budget Variance Report to analysis the expense vs budget against a cost center. At any point of time, user can check Budget Variance Report to analyse the actual expense incurred vs budget allocated against a cost center or a project.
To check Budget Variance report, go to: To check Budget Variance report, go to: