Configure budget planning components
The Budget planning configuration page contains most of the settings that you require to set up budget planning. The following sections describe some key factors that you should consider as you configure budget planning. After you've completed the configuration, you can set up budget planning processes. You can view and maintain the budget planning configuration by navigating to Budgeting > Setup > Budget planning > Budget planning configuration.
Create a budget planning schema
An optional, but recommended first step, is to create a budget planning schema that shows your organization's procedure for formulating a budget. You can use any method that you want to create this schema.
Organization hierarchy for budget planning
On the Organization hierarchy purposes page, in Organization administration > Organizations > Organization hierarchy purposes, you can designate an organization hierarchy as a budget planning hierarchy for each budget planning process. The budget planning hierarchy doesn't have to match the standard organization hierarchy that is used for other purposes.
Because this hierarchy is used to aggregate and distribute data, you might want it to have a different structure. In the example schema, the sales departments are under a headquarters level that includes budget and finance departments. This structure likely differs from the structure that is used to manage operations for the sales departments. Only one organization hierarchy can be assigned to each budget planning process.
The hierarchy must be assigned to the Budget Planning purpose in the Organization hierarchy purposes page.
User security
Budget planning can follow one of two security models to define user permissions. To specify the security model, access Budgeting > Setup> Budget planning to set a budget planning parameter on the Budget planning configuration page.
Budget planning workflows stages
Budget planning workflows are used with Budgeting workflows to manage the creation and evolution of budget plans.
A budget planning workflow consists of an ordered set of stages that a budget plan moves through. Each budget planning workflow is associated with a Budgeting workflow. Budgeting workflows are one of the types of workflow that are used throughout Finance.
Note that there should be n-1 stage transition workflow tasks for the budgeting workflow to move between stages. For example, if there are 6 stages, there should be 5 stage transitions.
The Budgeting workflow routes the budget plans, together with worksheets, justifications, and attachments, through the organization for review and approval.
You can create the budget planning workflow in the Workflow stages section of the Budget planning configuration page. There, you can select the stages and the Budgeting workflow that will be used, and configure more settings.
The following image shows an example of a Headquarters workflow.
A unique budget planning workflow is typically required for each level of your hierarchy. It is a good practice to create a budget planning workflow for each level of a budgeting hierarchy. Then, you can assign a Budgeting workflow that contains elements that correspond to the stages in the budget planning workflow. In the example schema that appears earlier in this article, one budget planning workflow would be created for the sales departments, and another would be created for the headquarters. A Budgeting workflow moves the budget plans through the stages by means of the stage transition workflow tasks that you add in the workflow designer.
You can create the Budgeting workflow for budget planning on the Budgeting workflows page. The workflow includes elements for allocation to sales departments and aggregation of their submissions, review by the budget manager, approval by the CFO, allocating or copying between scenarios, and stage transitions between each stage.
You can assign the Budgeting workflow to each budget planning workflow in the Workflow stages section of the Budget planning configuration page.
Watch this video to learn more about workflows and budgeting.
Parameters, scenarios, and stages
The initial settings on the Budget planning configuration page let you create building blocks for later configuration steps:
Parameters - Parameters define the security rules that you want to apply to budget plans and the default financial dimensions that should be used when users drill into the budget plan scenario amounts.
Scenarios - Scenarios encompass the categories of data that you want for the budget plans. You can define budget plan scenarios to support monetary and other unit of measure classes, such as quantity. In a budget plan, scenarios represent one version of budget planning data. Examples of monetary budget plan scenarios include Prior year sales and Contracts signed. Examples of scenarios that use quantities include Number of sales calls and Full-time equivalent (FTE) count.
Stages - Stages define the steps that a budget plan follows from its inception to final approval. Examples of budget planning stages include HQ Rollup, CFO Review, and Final.
Allocation schedules
In budget planning, you can allocate the amounts or quantities on budget plan lines from one scenario to another scenario, or even to the same scenario. For example, you might allocate to the same scenario if you want to apply changes to the financial dimensions or the dates of the amounts in that scenario. An allocation can be done within a budget plan or from one budget plan to another.
Allocation schedules define how an allocation should be performed and which scenarios are involved based on the next configuration page, which is the Stage allocations tab, where budget plan lines are automatically allocated during workflow processing.
Note that a corresponding task for budget plan allocation is also required in the budgeting workflow.
You can perform allocations by using any of the following methods in the Allocation method list.
Allocate across periods - You can use a period allocation key to allocate budget plan lines from the source budget plan scenario across periods in the destination scenario. Before you can allocate across periods, set up period allocation keys on the Period allocation categories page.
Allocate to dimensions - The budget plan lines are allocated from the source budget plan scenario across the financial dimensions in the destination scenario. Before you can allocate to dimensions, set up budget allocation terms on the Budget allocation terms page.
Aggregate - The budget plan lines are aggregated from the source budget plan scenario in the associated budget plans to the destination scenario in the parent budget plan.
Distribute - The budget plan lines are distributed from the source budget plan scenario in the parent budget plan to the destination scenario in the associated budget plans.
Use ledger allocation rules - The budget plan lines are distributed from the source budget plan scenario to the destination scenario, based on the ledger allocation rule that is selected.
Copy from budget plan - You can select another budget plan to use as the source of the allocation.
Stage allocations
Stage allocations are used to define when allocation schedules for budget plan lines should be automatically run during workflow processing. When stage allocations are used, budget plan lines in the destination scenario can be created and modified without the intervention of the budget plan preparer or reviewer. Access Stage allocations through Budgeting > Budget planning configuration > Stage allocations
When you set up a stage allocation, you associate the budget planning workflow and stage with the allocation schedule. The budget planning workflow must be associated with a Budgeting workflow that uses the Budget planning stage allocation automated workflow task. When the workflow reaches the specified stage, the allocation occurs automatically. This automated task can be used to create budget plan lines in a new scenario.
Priorities
You can optionally use budget plan priorities to define categories and objectives for the budget plans that you've set up. You can also use priorities to organize, classify, and evaluate several budget plans. For example, you can create a budget planning priority for health and safety, and then evaluate budget plans that are assigned to that priority. You can also assign a number to rank budget plans across all budget plans.
Columns and layouts
Budget figures appear on a budget plan in rows and columns. You need to first define the columns, and then you can create a layout to define the presentation of the columns.
To define a column, select a budget plan scenario. The line amounts from that scenario are shown on the budget plan. You can select a period to filter the amount, and you can also apply filters that are based on the ledger account.
When you're defining a layout, select a ledger dimension set to create the budget plan rows that you want to display, and select the columns as layout elements. You can create multiple layouts so that a budget plan shows the data that you want at different stages of the budget planning process.
In addition to columns for budget amounts, you can define columns for the project, proposed project, asset, and proposed asset fields from the budget plan. You can also define a column for budgeted positions. This option is useful when you must analyze personnel budgets.
Additionally, you can designate whether each layout element (column) is editable, and whether it's available in any worksheet template that is created for that layout. For the example schema, in the layout that is used for the Estimate stage, the Forecast columns are editable, whereas the PY Sales and Contracts columns are read-only.
In the Layouts section of the Budget planning configuration page, you can also generate, view, or upload Excel templates. These templates are the workbooks that are linked to each budget plan to provide additional analysis, charting, and data entry capabilities.
You can generate, view, or upload a template for each layout. When a template is generated, the layout is locked and can't be edited. This lock helps guarantee that the template format matches the layout of the budget plan and includes the same data. After a template is generated, it can be viewed and edited. For example, you can add charts to the template or further customize its appearance.
The template should be saved to a location that the user has access to so that it can be uploaded to the layout after editing is completed. That way, the template will be used with budget plans that use the layout.
Updating large number of budget plan records using the open in Excel (OData) experience can be time consuming during the publishing process. A parameter in the budget layout templates allows budget plan records to be mass loaded from the budget menu using batch processing, removing that wait time. The same template can also be published using the OData experience if only a few changes have been made. The parameter uses a data management framework (DMF) upload approach when enabled. This parameter will create the DMF project for the users and enables the mass update budget plan lines menu item found in the budget plans. The user will be able to open the worksheet and either publish with the Excel add-in tools or save the worksheet to be uploaded using the mass update tools.
Descriptions
The descriptions that you can assign in the Layouts section are used to display the name of a financial dimension that is included in a layout. For example, an organization might want to display the main account name next to the main account number in a budget plan, but might want to omit the names of other financial dimensions to avoid cluttering the display.
Set up budget planning processes
After you've finished configuring budget planning, you can set up budget planning processes on the Budgeting > Setup > Budget planning > Budget planning process page. Budget planning processes are sets of rules that determine how budget plans can be updated, routed, reviewed, and approved in the budgeting organization hierarchy.
For each budget planning process, you first select a budget cycle and a ledger. Each budget planning process is related to only one budget cycle and one ledger. Then, select the budget organization hierarchy on the Budget planning process administration FastTab, and assign a budget planning workflow to all the responsibility centers in the organization that appear in the grid.
To assign or change the budget planning workflow for similar responsibility centers, select Assign workflow, and then select the organization type to target and the budget planning workflow to use. The Budgeting workflow ID that is associated with each budget planning workflow is automatically added to the grid.
When you define the stage rules and templates on the Budget planning stage rules and layouts FastTab of a budget plan, you can define a different set of rules and default layouts for each budget planning stage. For example, the Sales department Estimate stage can let users modify the lines in a budget plan but prohibit users from adding lines. The Submitted stage can let users view lines, but not add or modify them, because the work at that stage has been completed, and changes to the budget plans must be prevented. To select the layouts that are available for budget plans, select Alternate layouts.
You can optionally select budget planning priorities on the Budget plan priority constraints FastTab. Priorities can then be selected on budget plans.
The final step is to activate the budget planning process from the Actions menu. A budget planning process can't be used until it has been activated.
On the Actions menu, you can also create a new process by copying an existing process. This feature is useful for organizations that follow the same process flow for each budget cycle and make few changes or no changes.
Another useful command on the Actions menu is View budget process status. This command graphically displays the budget plans within a process, together with relevant data, such as the plans' workflow status, summaries by amount and by unit, and one-click navigation to the budget plans themselves.