Double entry budget

If you edit your budget for any reason during the year, then you are required to track budget transactions for the purposes of reporting and accountability. You can use double entry budgets separately or with commitments as an additional budget control device.

If you use double entry budgeting, then you can only make changes to your budget amounts through a process of balancing budget journal entries within the Budgeting application. Budget journal entries record any changes to the amounts or units assigned to a budget and must be balanced between two or more budget records. This concept is similar to accounting, where debits must equal credits. Double entry budgeting creates an audit trail. If you create a budget version before posting occurs, then you can also compare budget balances and budget transactions between the original and adjusted versions of a single budget.

You identify a budget as a double entry budget when you define your budget header information in Define Budget (FB20.2). See Defining budget header information. You must make any changes to the budget in Budget Journal Entry (FB40.1).

Example

You manage the budget for School District 822 for the City of Oz. Because of unanticipated and significant increases in energy costs last winter, the budgeted amounts in the Utilities expense account are not enough to cover gas and electricity costs for the school year. You will need to move funds from the Maintenance expense account to the Utilities expense account to cover the additional costs by releasing and posting the journal entry to update the budget balances.

If you use double entry budgeting, then create a budget entry to transfer funds from the Maintenance expense account to the Utilities expense account. You will create a budget journal entry with two transaction lines: one taking funds from the Maintenance expense account, and one transferring funds to the Utilities expense account.