It’s really long time since my last post. Like most of you, I got busy with the projects these days. Here I’m back with a full length post on budgeting that should help both “who are new to Budgeting” and “who have some questions unanswered in their mind”.
Thought it’s been long time that budget features are unveiled with AX2012, still there are huge number of questions hitting from budgeting area and understanding the different options we have in “Budget control configuration” is still a challenge too. To understand this well, let’s go with a small example.
In this post, I use two terms 1. Budget definition 2. Budget control.
Scenario: An organization which uses “state”, “City” as it’s financial dimensions wants to implement budgeting. The requirement here is, organization would like to define the budget at “State & City” level (detailed level budgeting). Below is how they would like to define the budget
What I explained above is a budget definition. Budget has been clearly defined at State & City level.
Though the budget has been defined at the detailed level i.e., State & City level, Organization would like to control the budget at State level which means as below.
Budget defined for State1, CityX is 2000; State1-CityY is 1500. However, organization would like to give the flexibility that cities can exceed the budget allocated to them but overall the state shouldn’t exceed the budget allocated to it. Below actual expenditure is valid as per the organization budget control policy.
Now, lets see how this can be configured in the system and at the same time let’s understand few important things in budgeting.
Dimensions for budgeting:
Budgeting> setup> Basic budgeting> Dimensions for budgeting
Dimensions that are selected in this form will be shown while you are creating budget register entries.
Select the dimensions which should be part of your budget definition. As per our example, here you would need to select “State”, “City” because the organization would like to define the budget with State & city combination.
Budget control dimensions:
Budgeting> Setup> Budget control> Budget control configuration
Select the dimensions at which dimensions the budget should be controlled. As per our scenario, here you would need to select only “State”.
Budget register entries:
Whatever the budget definition that we discussed in our example can be created using budget register entries.
Tip: Make sure a green colour mark appears against your budget register entry. If you don’t see this, then the budget you defined will not be controlled.
Ex: we defined the budget as 3000 USD, he doesn’t see the green colour mark but he uploaded the budget balances. Later a user creates a transaction with 4000 USD. Still the system will allow this transaction.
Though you defined the budget with State&City dimensions, system captures this information only with the state dimension because budget control dimension is “State”
Budget control statistics:
In the above image, you can notice budget data is saved just with “State”. City has not been considered by the system since the budget control dimension is selected as “State”.
Budget control at the time of a transaction:
In the above image, you can see a user entered a transaction with Cleaning expense (605110)– State1- CityX with an expense of 3500 USD.
The original budget defined for cityX is 2000 but system doesn’t throw any error even if the transaction amount is 3500 USD. Because of the reason, budget is controlled at the state level, system validates the budget only at the state level.
If we included State & City as our budget control dimensions, we would have received the budget violation error because the budget gets validated at the city level.
Here are some interesting questions that I’ve seen people asking in the forums.
Q: Can we select more than one accounting structure in the Budget control configuration?
A: No. In the budget control configuration, you can select only one accounting structure. Only the budgets that are defined for the accounts in this selected accounting structure will be controlled.
Q: Accounts of which account types we can control the budget on?
A: Only the Budgets that are defined for accounts of below account type will be controlled.
- Profit and loss
Q: If you define the budget for accounts of other type that will be just information purpose only and it won’t be controlled.
A: I have set up the budget but I don’t see the budget getting controlled. User is able to post a transaction that exceeds the allocated budget. What could be the reason?
Make sure your account satisfies the above requirement and a green colour check box appears against your budget register entry (as shown in the image- Budget register entries). If you don’t see the check box, you don’t see the budget getting controlled.
Q: Why I’m not seeing a green colour mark against my budget register entry?
A: It could be because of your budget control configuration. To know more, wait for the next post.
Q: I have created budget register entries and later changes my budget control dimensions. what will happen in this case?
A: The changes will not effect the budget register entries which are already posted.
Your comments on this post are most welcome. Keep reading and Keep Daxing.
Stay tuned for the consecutive post on Budgeting.
Sunny – DAXing