Budgets

Finance Budgets

A finance budget limits what may be spent on a nominal account, a cost centre or both, for a year or one period. Purchase orders are checked against it when they are issued, so a budget can warn, route an order for extra approval, or refuse it. The Budgets tab of Ledger & Finance shows each budget line against what is committed on orders and what has actually been spent.

Where to find it

Admin Panel → Finance:

• Ledger & Finance — the Budgets tab: add, change, lock and remove budget lines, and see budget against committed and actual spend

Architect Panel → ERP - Finance:

• Budgets — the budget lines as a datastore; its badge counts blocking budgets with no budget holder

Adding a budget line

1. Choose the company at the top, open Budgets, choose the Version and Financial year, and press Add a budget line.
2. Give an Account, a Cost centre, or both. Optionally narrow it by Analysis 2 and Analysis 3.
3. Set the Financial year (blank for every year) and the Period (Whole year or one period).
4. Enter the Amount and its Currency.
5. Choose the Enforcement: Company default, Warn, Route for approval, Block or Off.
6. Optionally allow a margin with Tolerance % or Tolerance amount, and limit the line with Effective from and Effective to.
7. Tick Lock it (approved - not changed by later edits) once the budget is agreed, and press Add budget line.

What the enforcement modes do

• Warn: an order that would go over is allowed, and the breach is recorded.
• Route for approval: also allowed and recorded, and it is the signal an approval matrix can use to add an approval stage.
• Block: an order that would go over, beyond any tolerance, is refused.
• Off: no check.

When an order line matches both a finance budget and a project budget, both have to permit it. If the system cannot tell whether a budget applies, it refuses rather than letting the spend through unchecked.

Reading the tab

The cards show Budget, Committed (ordered, not yet received), Spent (posted to the ledger) and Remaining. The table lists each line with Budget, Committed, Received (orders), Spent (ledger), Remaining and Used / status; select a line to see the transactions behind it. A note above the table says how much expense was posted to accounts and cost centres no line covers. Export writes the table as CSV.

What goes wrong

• "Pairs of budget lines overlap exactly": two lines cover the same account and cost centre equally specifically, so a purchase coded to them is refused until one is changed or removed.
• "Give an account, a cost centre, or both": a line needs at least one.
• A line cannot be removed: it already has commitments or actuals. Set its amount to 0 instead.
• Orders blocked on day one: a company's default enforcement is Block before budgets are written. Use Warn until every line exists.

Worked example

A company budgets 12,000.00 for the year on 6500 Advertising and marketing for cost centre CONS, enforcement Warn. A quarter later the Budget Breaches list shows three orders that went over, all for a trade show the budget missed. The controller raises the line to 15,000.00, locks it, and switches it to Block with a 5% tolerance. The next order that would take marketing past 15,750.00 is refused when the buyer tries to issue it.

Recommendations

• Run in Warn for a quarter before switching to Block: the breaches show what Block would have stopped.
• Prefer one specific line to two overlapping ones; overlaps refuse spend.
• Lock agreed budgets so later edits do not change the approved figure.
• Give each cost centre a budget holder on the Set-up tab if your approval matrix routes to budget holders.

Budget Settings, Commitments and Breaches

Behind the budget lines sit three things a finance team configures once and then reads: each company's budget settings, the commitments every order has made against a budget, and the breaches the budget check recorded. Together they decide how hard budgets bite and show what they would have stopped.

Where to find it

Architect Panel → ERP - Finance:

• Budget Settings — per company: default enforcement, what happens to spend with no budget, and when a commitment is released
• Commitments — every movement that consumed or released a budget, append-only
• Budget Breaches — what the check allowed in Warn mode and what it refused; the badge counts breaches nobody overrode
• Budgets — the budget lines

Admin Panel → Finance:

• Ledger & Finance — the Budgets tab, which shows each company's settings above its budget lines

Budget settings

One row per company, with a row for company 0 as the default for every company without its own.

• Default Check Mode: the enforcement a budget line uses when it says Company default. Warn unless you change it.
• Unbudgeted Mode: what happens to spend no budget line covers. Warn by default; blocking it on day one would stop every requisition, because nobody has written a budget for stationery yet.
• Relieve At: whether an order stops consuming budget when the goods are received or when the bill arrives. It must match where your posting rules recognise the cost, or the budget counts it twice. A service bought without a goods receipt, where its match policy does not need one, is relieved at the bill either way.
• Include Requisitions: whether a requisition commits budget as well as an order. It stops a second requisition for the same money.
• Requisition Expiry Days: how long a requisition's commitment is held if it is never ordered. The Budget Housekeeping task releases it after that.

Setting a company up

1. Open Budget Settings and add a row for the company, or edit company 0 for everyone.
2. Leave Default Check Mode and Unbudgeted Mode on Warn while budgets are being written.
3. Set Relieve At to match your posting rules: receipt if stock and costs post at goods receipt, invoice if they post at the bill.
4. If you turn on Include Requisitions, enable the Budget Housekeeping task (daily) so forgotten requisitions release their budget.
5. Write the budget lines on the Budgets tab of Ledger & Finance.

Commitments

Every order that commits budget, every receipt or bill that relieves it and every closed order that gives the balance back is a row in Commitments. Open commitment is the sum of these rows, so nothing there edits an amount: a correction is another movement. Read and investigate here; commit through the document lifecycle, never by adding rows. Reversing a goods receipt also reverses the budget relief it made.

Breaches

Budget Breaches lists what the check allowed through because it was in Warn mode, and what it refused. A breach is recorded when the move is actually attempted, not when someone only views an over-budget draft. This is how you find out what a budget would have stopped before you switch it to Block.

What goes wrong

• A budget counts spend twice: Relieve At does not match where the cost is posted.
• Requisitions hold budget for ever: Include Requisitions is on and Budget Housekeeping is not enabled.
• Everything is refused: Unbudgeted Mode is Block and lines are missing.

Worked example

A company posts costs when goods are received, so Relieve At stays on receipt. It turns on Include Requisitions with 60 Requisition Expiry Days and enables Budget Housekeeping. After a quarter on Warn, Budget Breaches shows 14 breaches, 12 of them on two cost centres whose budgets were set too low. The controller corrects those two lines, then changes the company's Default Check Mode to Block.

Recommendations

• Start every company on Warn, and read Budget Breaches monthly.
• Agree Relieve At with whoever owns the posting rules.
• Never edit Commitments; correct the document instead.
• Enable Budget Housekeeping whenever requisitions commit budget.