General Ledger budget amounts

The comprehensive budget is evidence of a company’s business plan. The budget ties diverse activities together by providing information for decision making, communicating targets or goals, and specifying the means for achieving those goals. Each division or department manager has responsibility for a segment of the overall budget and knows what must be finished to achieve the desired goal.

Budgets forecast future events and can be created automatically through GL Administrator Create Budget Report or GL Budget Setup. Budgets that are created in GL Administrator Create Budget Report can be maintained through GL Budget Setup.

Budgets should begin with a sales forecast. Inventory requirements, cash flows, operating expenses, and financing requirements are governed by expected revenues. How each of these elements are related depends on your company’s managerial policies and operating characteristics. Seasonal businesses have different timing objectives to consider. They must buy inventory in advance of the selling season, thus creating a requirement for funds before the receipt of cash from customers.

The requirement for a formal budget is apparent in all businesses. Budgets give managers consistent objectives to follow. Without correct planning, goals are achieved only by accident.

Budgets span a specific time frame and can be created for the current fiscal year, or a future fiscal year and broken into segments or periods. Budget records can be added and changed at any time to coincide with various assumptions that are made. You can set up 99 budget records for each account code. Use revision numbers that distinguish each record. If you create a budget for the second quarter of the year with the same revision number as the first quarter, the budget period amounts for the first quarter will be overwritten with zeros.

Use GL Administrator Roll Budget Report to roll the first quarter budget forward. After the initial budget has been set up, the budget can be copied to other account codes with GL Administrator Copy Budget Report, rolled to future periods with GL Administrator Roll Budget Report, or frozen using GL Administrator Freeze Budget Report.

Budgets express targets or goals; actual results express achievements. Actual performance is best judged by comparison with expected, rather than past performance, because the business environment might change. Expectations must be reasonable, carefully formulated, and based on all available information. A comparison of the budgeted and actual results forms a basis for evaluating performance and helps control future operations. Budgets can only be reported on financial statements developed through GL Financial Statement Setup. Budget records can be built for future years as long as the account codes exist in the current or previous years.

After setup is complete, print the accounts through the GL Budget Master List Report to verify that the information gives you the desired results.

The actual period amounts from GL Account Setup for this account code are shown in the Actual column.

After a budget has been set up and approved, or is waiting for approval, use GL Administrator Freeze Budget Report to freeze the budget to prevent unnecessary change. An information-only Frozen Budget field is displayed. The field value is likely Yes, with the date the budget was frozen.

You must complete GL Account Setup before entering customer information.