Decentralized Budgeting

This process is used to enter a budget in a decentralized management environment. This allows each budget officer to control his/her budgeting.

The process is completed when the regular budget is updated with the entries made by each budget officer.

Before you start

  • Your company must have a well-defined routine for how to handle budgets.
  • Budget templates must be defined in ‘Budget Template. Open’ (BUS030). Refer to Enter Budget Template [Procedure].
  • Budget officers must be defined in ‘Budget Officer. Open’ (BUS035). Each budget officer contains information about, for example, the budget template used, the values used to calculate the yearly estimate and the accounting dimensions 2 to 7 to be used.
  • A budget with basic data must be defined in ‘Budget. Open’ (BUS100).

Follow these steps

  1. Update budget officer

  2. Enter decentralized budget

  3. Create budget from decentralized budget

Update Budget Officer

To display the correct estimates, every budget officer must be updated to reflect the period to be used for calculations of the estimate for the current year.

The update is done for each budget officer in ‘Budget Officer. Open’ (BUS035), usually by the senior officer in charge of the entire budget. The data that needs to be updated includes:

  • The budget from which the calculation is made
  • The period for actual and budget.

Enter Decentralized Budget

The decentralized budget is entered by the budget officers themselves. First, each officer selects central budget and budget version. Then each officer enters amounts to be budgeted and/or resources to be budgeted and also how to allocate. The officer uses a budget template when doing this.

Decentralized budget is entered in ‘Budget. Open Decentralized’ (BUS110).

Create Budget from Decentralized Budget

The information entered in the decentralized budget is transferred to the budget in ‘Budget. Open Decentralized’ (BUS110), by using option 9=‘Transfer’. This option starts ‘Decentralized Budget. Transfer’ (BUS119), which processes the actual transfer. The transfer is carried out as follows:

1. Budget lines in the decentralized budget containing an amount are recorded using accounting dimension 1 from the budget template and dimensions 2 to 7 from the budget officer.

2. Budget lines in the decentralized budget containing a number of resources are recorded as follows: The cost(s) that are connected to each resource is retrieved. Accounting dimension 1 is connected to that cost. The cost is then multiplied by the number of resources and a result is received. This result is recorded using accounting dimension 1 from the cost and dimensions 2 to 7 from the budget officer.

An exception to step 2 above is when the resource used belongs to a different cost center than the one specified for the budget officer. When this occurs, in addition to the above, a revenue record is entered for that cost center.

Related topics