Set up basic budgeting
The following video demonstrates how to set up basic budgeting.
When you set up budgeting, start on the Budgeting > Setup > Budget planning > Budgeting parameters page. On this page, you define the budget journal, the number sequence for budget register entries, and the default behavior in the workspaces.
Next, if policies exist that govern the approval of budget register entries, based on budget type (such as transfers or revisions), you need to create budget register entry workflows on the Budgeting workflows page. If scenarios occur where the system might allow transfers without workflow approval, you can define budget transfer rules to support those scenarios.
Use the Budgeting dimensions page to specify which financial dimensions in the account structures that are associated with the chart of accounts are available for budgeting.
Some organizations might not define specific financial dimensions, including the main account for Budgeting, which could provide more flexibility. For example, the account structure for the chart of accounts might have Department, Cost center, and main account financial dimensions. If you select the Department and Cost center financial dimensions for Budgeting, the departments and cost centers can hold budget amounts regardless of which main account is used.
On the Budgeting dimensions page, select the financial dimensions that you use for budgeting based on the dimensions in the chart of accounts. You can select all financial dimensions or a subset of them for budgeting.
You can define a budget model that corresponds to all or some of the budgets, and you can use a single budget model for all budget register entries. Alternatively, you can create separate models that are based on the budget type, geographical location, or some other way to classify a budget.
If you're using budget control, you can associate only one budget model with a specific budget cycle time span.
You can create budget codes that identify the type of budget transactions to record and any related workflow. Budget codes can support the following budget types:
Original budget
Transfer
Revision
Encumbrance
Pre-encumbrance
Carry-forward budget
Budget codes allow you to have an audit trail of approved budget modifications throughout the course of the budget cycle. If you associate a workflow with a budget code, the system turns on the workflow for all budget register entries that use that budget code. As a result, you need to complete workflow steps before the budget register entry can reach the Completed stage.
Optionally, you can set up budget transfer rules. To use budget transfer rules, select Use rules for budget transfers on the Budget parameters page. When you use budget transfer rules, if someone creates a document by using a budget code of the Transfer type, the system won't update budget balances if the budget transfer rules are violated. For example, you can allow budget transfer documents where the expense budget is transferred between the main accounts for the Sales and Marketing departments. However, you can prohibit budget from being transferred from or to that department unless workflow approval is granted for that type of budget account entry.
You can use the Budget models page to create various budget models. You can use a single budget model for all or some budgets, or you can create a budget model for each budget.
A budget model can contain many submodels, which you attach to the budget model on the Submodel FastTab. For example, you could create a budget that has submodels that represent the various departments of the legal entity.
Budget models that you use as submodels can't contain other submodels. Also, if you use budget control, you can't use budget models that have submodels.
On the Budget transfer rules page, you can define budget transfer rules to determine when to allow budget transfers between financial dimension values.
For example, you might allow budget transfers in a specific department without approval; however, you might require that managers review and approve transfers across departments before a user can adjust the budget balance. If a user submits a budget register entry and it violates the budget transfer rules, they can complete the transfer only if a manager approves it through a Budgeting workflow.
Some organizations require that a user other than the person who completes the entries should approve budget register entries and budget account entries. You can require manual approval, workflow approval, or no approval. If you use budget control, you can set up workflows so that a budget manager approves the entries.
You can also set up budget transfer rules to work with Budgeting workflows. For example, you could set up a budget transfer rule to allow only budget transfers within departments. After you define the budget transfer rule, you could create a workflow to route a budget transfer to a specific user to approve for budget transfers between departments.