A budget is a set of amounts that is expected to be spent or earned during a given time period. Most organizations compile budgets annually to plan for expenses and revenues.
In this chapter, you will learn how to use the budgeting functionality in QAD Enterprise Applications.
You will learn how to set up and update budgets, both manually and using Excel integration.
Your instructor will demo the main budgeting functionality including Excel integration.
Then, you will learn about the setup process, which elements it includes and which steps are required, manually and using the Excel integration.
Once your budget is set up, you will learn how to update it using the Excel hotlink.
Finally, you will practice what you have learned by completing an exercise.
Use the Budget Create (220.127.116.11) activity to define budgets for a single entity or for a group of entities that use the same shared sets. The entities can be in the same or different domains.
Budgets are composed of a structure of budget topics, each identified by a topic code and linked to a single or group of accounts, sub-accounts, cost centers, projects, or SAFs. You also define the hierarchy of topics for which budget and actuals data will be accumulated, and the position of subtotals and COA components in the hierarchy.
The slide shows the steps involved in the budget business process.
A budget group is any combination of accounts, sub-accounts, cost centers, projects, and SAF codes used to update actuals for a budget topic.
Use Budget Group activities (25.5.2) to create, view, modify, and delete budget groups.
You link a COA component to a budget group by assigning a group name when you create or modify the component definition in, for example, GL Account Create (18.104.22.168) or Cost Center Create (22.214.171.124).
Budget Report Periods
Budgets also include report periods that are linked to budget versions, and are used by the budget reports. Report periods let you mark a specific time span for which you want to produce budget reports. Reporting periods are independent of GL periods and tax periods, and can span multiple GL periods across multiple entities.
Use Budget Report Period Create (126.96.36.199) to define report periods. Budgets can have multiple versions, and you must associate each version record with a valid reporting period.
Use Budget Create (188.8.131.52) to create budget periods, levels, and structures.
Budget Create Header Fields
In the following are the main fields in the header of Budget Create (184.108.40.206):
Specify a code (maximum 20 characters) to identify the budget.
This field displays the budget status. Budgets can have one of the following statuses:
Initial: The preliminary status of a budget. The status field is read-only and set to Initial until you define budget periods and levels.
Valid: Indicates that the budget can be modified and is ready for use. The status changes automatically from Initial to Valid when you define the budget periods and budget levels. You cannot change a budget status from Valid to Initial.
Operational: Indicates that the budget setup is complete, and that actuals will be retrieved by the Budget daemon.
You must manually change the budget status to Operational to allow the actuals to be updated. You can change a budget status from Valid to Operational, and from Operational to Closed.
Note: The system generates Budget daemon requests for operational budgets only.
Closed: Indicates that the budget life span is complete. You can reopen the budget by changing its status to Operational.
General Budget Data
Use the General tab to specify the scope of the budget activities and the entities that will provide the budget actuals. The following are the main fields in the General tab:
Specify a budget currency. The field defaults to the base currency for the domain, but you can modify this value.
Note: You cannot modify the currency if the budget has a status of Operational.
Report Period Check
Choose whether the system validates if a reporting period is open when a transaction is posted for that period on this topic.
Use Quantity Info
Select this field to include quantities in your budget, such as machine hours, kilowatt hours, or other quantifiable values. These quantities are specified at GL account level only using GL Account Unit of Measure.
Overrun (YTD), Total Overrun, GL Period Overrun
Choose how the system responds if the budget amounts from the start of the budget period to date, for the entire budget, or for a particular budget period are overrun. In each field, the options are No Action, Warning, or Error.
No Action: The system allows the user to enter transactions that cause overruns.
Warning: The system warns the user that the budget is overrun, but allows the user to save the transaction.
Error: The system prevents the user from saving a transaction that overruns the budget figure.
Check Actuals On-Line
Select the field to enable online budget check.
Each time a linked budget account is specified in banking entry, journal entry, customer and supplier invoices, open item adjustment, or petty cash activities, the system will check if the new transaction causes the budget amounts to be overrun.
In addition, if you choose Warning or Error in the Overrun (YTD), Total Overrun, or GL Period Overrun fields, the system will display a warning or error if a transaction causes a budget overrun for the corresponding time frame.
Note: This field has an effect only when Online Budget Check is selected in the system settings in System Maintain (220.127.116.11), and when the budget is operational.
Send E-mail on Errors, Send E-mail on Warnings
Select the relevant field to send an e-mail to the budget administrator if an overrun error or warning occurs. The system sends the e-mail to the address defined in User Maintenance (36.3.1) for the user specified in the Budget Administrator field.
Used for Allocation
Select the field if the budget structure will be used for allocations.
GL accounts, sub-accounts, projects, cost centers, and SAFs can be used in allocation structures.
Use as Report
Select the field if the budget structure will be used to define a report hierarchy for the Balance Sheet and Income Statement structured reports.
When you select Use as Report, the system validates and categorizes the report structure data differently than general budget data.
Use in Financial Report Writer
Select this field if the budget is to be used for financial reports. You can include the budget as a column in a report to compare the budget amounts with actual postings. The Use in Financial Report Writer field is exclusive. You cannot select it in combination with the Used for Allocation or the Use as Structured Report fields.
This field is only available if you select the Use in Financial Report Writer field. Enter a valid report chart of accounts or click the lookup and select a report chart of accounts from the Report Chart Search list. When you select a report chart, the Entity Code field is automatically populated with the entities associated with that chart.
Specify the entities that will update actuals for the budget.
Important: For Financial Report Writer budgets, the Entity Code field is automatically populated with all entities linked to the report chart. The list of entities is read-only. If you want the budget to apply to only a few entities, add topics at the highest level in the budget structure and link those topics to report analysis codes that contain the entities you require. This step facilitates the link between the budget structure and the report tree structure.
Use the Budget Period tab to create the budget periods for which the budget is valid.
Budget periods can be based on GL periods or can be different.
Note: The system creates a budget column and a forecast column in the grid in the Structures tab for each budget period you define. If the budget uses quantities, the Structures tab also contains a column for budget quantities and forecast quantities for each budget period.
Budgets can contain a maximum of 54 periods and can run over multiple years. You can also create a single budget period to span an entire year.
You cannot define budget levels or structures until you define the budget periods.
You can define budget periods:
Manually. Enter all budget period codes and start and end dates manually in the budget periods grid.
Based on an existing GL calendar year. The budget periods are equivalent to the GL periods of the year you specify. Click the Create Budget Periods button to create the periods.
From rules. Enter the start date, the number of periods, and define whether the periods are defined by week, month, or quarter. The system then creates the budget period table when you click Create Budget Periods.
Note: If you are creating a budget structure for use in Financial Report Writer, the budget periods you enter must correspond with periods used in the Report Cubes. When you open the Budget Period tab, a message is automatically displayed to inform you of this.
This grid contains a row for each budget period you define. When creating budget periods manually, right-click to insert a row.
Periods by Year Field
Specify a GL calendar year on which to base the budget periods. The system creates budget periods that are equivalent to the GL periods of the year you specify. Use this option independently of the Periods by Dates fields.
Periods by Dates Fields
The system uses the data in these fields to automatically generate budget periods
Use the Levels tab to define the hierarchy and level of detail to include in the budget structure. A budget can contain a maximum of eight levels.
At each level, you can specify whether to include GL accounts, sub-accounts, cost centers, projects, SAFs, or subtotals, and create a sequenced list. A subtotal is a calculated field that shows the sum of all underlying levels, both for budget and actual data. If the budget includes SAFs, they must be at the lowest level within the hierarchy.
Note: If you are creating a budget for use in Financial Report Writer, two COA elements are available: Report Analysis Code and SubTotal.
Use the Structures tab to create the budget topics according to the structure defined on the WBS Levels tab, and enter data for each topic. WBS is an abbreviation of Work Breakdown Structure.
The columns in the grid default from the settings on the General and Budget Period tab. The grid contains a column for the topic code, a budget column, and a forecast column for each budget period. In addition, if you select the Use Quantity Info field in the General tab, the grid includes a Budget Quantity and Forecast Quantity column for each budget period.
When you select a topic for an operational budget, the system displays the linked account or COA component and the total actuals for the topic at the bottom of the Structures tab.