Budget overview

A budget is a projection or estimate of business activity that you calculate for the current or next fiscal year. Budgeted activity is compared to actual activity when the period becomes current.

Budgets are created for a specific company, posting accounting unit, and account. You define budget values based on units, amounts, and rates. Units represent the quantity of an item or service, amounts are defined by a dollar amount for the unit, and rates are multipliers that affect the amount. Additionally, you can forecast budgets for each period, quarter, or year.

Use of posting accounts in budgets

A posting account is a detail account that is attached to an accounting unit for the purpose of posting. When you define a posting account, indicate which detail accounts you will use for an accounting unit.

A budget can store budget amounts for each period for all posting accounts in a company. You can create up to 999 budgets for a posting account per company per year.

Example

Two managers working for LGE Corporation have their own budgets for expenses.

  • Manager A, working in the MIS department at the corporate headquarters accounting unit 104, budgets $15,000 for travel (account 53150-0000).

    Manager A's budget entry for each period is 104-53150-0000 $15,000.

  • Manager B, working in the restaurant accounting unit 801, budgets $5,850 for travel (account 53150-0000).

    The budget entry of Manager B for each period is 801-53150-0000 $5,850.