Budget

Budgets are defined to indicate how much money is available for a particular purpose. In Project Accounting, you can budget at two levels: activity group and activity/account category. By associating a budget with activity groups or activities/account categories, you can monitor the use of resources and expenditures to ensure that you do not exceed what you have planned for.

Activity group budgets vs. activity budgets

You can define and use activity group budgets, activity budgets, or a combination of both:

An activity group budget consists of the planned costs for an activity group and defines the total projected amounts and units for all activities that belong to the activity group. Analysis by activity group budget is limited; you can explore information using Budget Listing (AC220) and Budget Variance Report (AC420). You cannot explore activity group budget information in the AC90 series inquiries or on analysis reports for activities, commitments, or encumbrances.
An activity budget consists of the planned costs for a single activity and account category and defines the projected amounts and units for a posting level activity and one or more of its account categories. The budget values from posting level activities are rolled up to create totals in summary level activities.

Activity group budgets and activity budgets are created and maintained separately from each other. Changes to an activity group budget are not reflected in activity budgets, and vice versa.

Budget time frames

You can define activity group and activity/account category budgets in three base time frames: life only, annual, and period.

Life only budgets store the total amounts or units projected for the duration of an activity group or activity. If you choose life-only for an activity group or activity budget, then you cannot define annual or period budgets. With life-only budgets, you always report on life-to-date budget to actual variances.

Period and annual budgets store projected amounts and units by period and year for an activity group or activity. Annual and period budgets are automatically kept in balance. Changes you make to period budgets are updated to annual budgets, and changes you make to annual budgets are updated to period budgets. With annual and period budgets, you can report on period-to-date, year-to-date, or life-to-date budget to actual variances.

Note: You can define annual budgets for multiple years. Budget years and periods are determined by the calendar associated with the activity group.

Several options are available to you when defining budgets. You can define activity group or activity budgets using any of these options:


For Activity Group, you can define budgets:	For Activity, you can define budgets:
For the entire duration of the activity group By year for an entire activity group By period for an entire activity group	For the entire duration of the activity By year for an activity/account category By period for an activity/account category For multiple account categories associated with an activity for any time frame For multiple activities associated with an account category for any time frame

Example

Moose Wood Outfitters wants to track all of the costs and hours for design of their new stores. Their annual design budget is $120,000 and 7,000 hours. This diagram shows the budget for the DESIGN activity:


Account category	Annual budget amounts	Annual budget units	Period	Period budget amounts	Period budget units
03070 Design Costs	115,000	4,600	1 2 3 4 5 6 7 8 9 10 11 12	9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,587	383 383 383 383 383 383 383 383 383 383 383 387
03010 Labor	5,000	2,400	1 2 3 4 5 6 7 8 9 10 11 12	417 417 417 417 417 417 417 417 417 417 417 413	200 200 200 200 200 200 200 200 200 200 200 200