Budget Management

Budget Management

Plan and control your institution’s finances with comprehensive budgeting tools that track planned versus actual spending.

Time Required: 20-30 minutes for initial setup Module: Budget Management (account_budget) Permissions: Budget Manager, Financial Manager

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Table of Contents

1. Overview
2. Prerequisites
3. Create Budgetary Positions
4. Create a Budget
5. Add Budget Lines
6. Budget Workflow
7. Monitor Budget Performance
8. Budget Reports
9. Field Reference
10. Best Practices
11. Troubleshooting

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Overview

The Budget Management module enables educational institutions to:

• Define budgets for academic years, semesters, or custom periods
• Link budgets to specific accounts and analytic accounts
• Track planned versus actual spending in real-time
• Analyze budget variance with automated calculations
• Control spending through budget position monitoring

Key Concepts

Concept	Description
Budgetary Position	Category that groups related accounts (e.g., “Salaries”, “Supplies”)
Budget	Financial plan for a specific period
Budget Line	Individual planned amount within a budget
Planned Amount	Expected income or expense
Practical Amount	Actual income or expense recorded
Theoretical Amount	Prorated planned amount based on elapsed time

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Prerequisites

Before creating budgets:

• Accounting module installed and configured
• Chart of accounts established
• Fiscal year defined
• Analytic accounts created (optional but recommended)
• Budget user permissions assigned

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Create Budgetary Positions

Budgetary positions group accounts for budget tracking.

Step 1: Navigate to Budgetary Positions

1. Go to Accounting > Configuration > Budgetary Positions
2. Click New

Step 2: Configure Position

Field	Action	Example
Name	Enter descriptive name	”Faculty Salaries”
Company	Select company	Your Institution
Accounts	Add related accounts	Salary expense accounts

Step 3: Link Accounts

1. In the Accounts section, click Add a line
2. Select accounts that belong to this budgetary category
3. You can add multiple accounts to one position

Common Budgetary Positions for Education:

Position	Accounts to Include
Faculty Salaries	Teaching staff payroll accounts
Administrative Salaries	Admin staff payroll accounts
Facility Expenses	Utilities, maintenance, rent
Academic Supplies	Books, lab materials, software
Student Services	Counseling, health services
Capital Expenditure	Equipment, infrastructure
Fee Income	Tuition, activity fees

Step 4: Save

1. Click Save
2. Position is ready for budget assignment

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Create a Budget

Step 1: Navigate to Budgets

1. Go to Accounting > Budgets > Budgets
2. Click New

Step 2: Enter Budget Header

Field	Action	Example
Budget Name	Descriptive name	”AY 2024-25 Operating Budget”
Responsible	Budget manager	Your name
Start Date	Budget period start	2024-07-01
End Date	Budget period end	2025-06-30
Company	Select company	Your Institution

Step 3: Save Header

Click Save before adding budget lines.

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Add Budget Lines

Budget lines specify planned amounts for each budgetary position.

Step 1: Open Budget Lines Tab

1. In the budget form, locate Budget Lines section
2. Click Add a line

Step 2: Configure Line

Field	Action	Description
Budgetary Position	Select position	Links to account group
Analytic Account	Select analytic (optional)	For department/project tracking
Start Date	Line period start	Can differ from budget period
End Date	Line period end	Can differ from budget period
Planned Amount	Enter planned amount	Positive for income, negative for expense
Paid Date	Expected payment date (optional)	For cash flow timing

Step 3: Amount Convention

• Revenue budgets: Enter positive amounts (e.g., 1,000,000 for fee income)
• Expense budgets: Enter negative amounts (e.g., -500,000 for salaries)

Step 4: Add Multiple Lines

Repeat for each budgetary position in your budget:

Example Academic Year Budget:

Position	Analytic Account	Start	End	Planned Amount
Fee Income	Main Campus	Jul 1	Jun 30	5,000,000
Faculty Salaries	Academic Dept	Jul 1	Jun 30	-2,000,000
Admin Salaries	Administration	Jul 1	Jun 30	-800,000
Facility Expenses	Operations	Jul 1	Jun 30	-600,000
Academic Supplies	Academic Dept	Jul 1	Jun 30	-200,000
Student Services	Student Affairs	Jul 1	Jun 30	-150,000

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Budget Workflow

State Transitions

Draft --> Confirmed --> Validated --> Done
  |                                    ^
  +-------> Cancelled                  |

Step 1: Draft

• Initial budget creation state
• Can be freely edited
• Not yet active for comparison

Step 2: Confirm Budget

1. Review all budget lines
2. Verify dates are correct
3. Click Confirm
4. Budget moves to “Confirmed” state

Validation Check: System validates that line end dates are not before start dates.

Step 3: Validate Budget

1. Budget manager reviews confirmed budget
2. Click Validate
3. Budget becomes active for tracking

Step 4: Complete Budget

1. At period end, review final variance
2. Click Done
3. Budget is closed for the period

Cancel Budget

• Use Cancel to void a budget
• Returns budget to inactive state
• Use Set to Draft to reopen cancelled budget

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Monitor Budget Performance

Real-Time Metrics

Once validated, budgets display calculated fields:

Metric	Calculation	Meaning
Practical Amount	Sum of actual transactions	What you actually earned/spent
Theoretical Amount	Prorated planned based on elapsed time	What you should have earned/spent by now
Achievement	(Practical / Theoretical) x 100%	Performance against timeline

Understanding Achievement

Achievement	For Revenue	For Expense
> 100%	Ahead of plan	Over budget
= 100%	On target	On target
< 100%	Behind plan	Under budget

View Budget Entries

1. Open a budget line
2. Click Action > Open Budget Entries
3. View all transactions affecting this budget line

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Budget Reports

Budget Analysis View

1. Go to Accounting > Budgets > Budgets
2. Use Group By options:
   • Budgetary Position
   • Analytic Account
   • Status

Pivot Table Analysis

1. Open budget list view
2. Click Pivot view button
3. Analyze:
   • Planned vs Practical by position
   • Variance by department
   • Monthly spending trends

Export Budget Data

1. Select budgets to export
2. Click Action > Export
3. Choose format (Excel, CSV)
4. Use for external reporting

Budget Comparison Report

Compare multiple budget periods:

1. Go to Accounting > Reporting > Budget Analysis
2. Select date ranges
3. Filter by analytic account
4. Export or print report

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Field Reference

Budget (crossovered.budget)

Field	Technical Name	Type	Required	Description
Budget Name	name	Char	Yes	Descriptive name
Responsible	user_id	Many2one	No	Budget manager
Start Date	date_from	Date	Yes	Period start
End Date	date_to	Date	Yes	Period end
Status	state	Selection	Yes	Workflow state
Company	company_id	Many2one	Yes	Company record
Budget Lines	crossovered_budget_line	One2many	No	Line items

Budget Line (crossovered.budget.lines)

Field	Technical Name	Type	Required	Description
Budget	crossovered_budget_id	Many2one	Yes	Parent budget
Budgetary Position	general_budget_id	Many2one	No*	Account group
Analytic Account	analytic_account_id	Many2one	No*	Department/project
Start Date	date_from	Date	Yes	Line period start
End Date	date_to	Date	Yes	Line period end
Paid Date	paid_date	Date	No	Expected payment
Planned Amount	planned_amount	Monetary	Yes	Budgeted amount
Practical Amount	practical_amount	Monetary	Computed	Actual amount
Theoretical Amount	theoritical_amount	Monetary	Computed	Prorated plan
Achievement	percentage	Float	Computed	Performance %

*At least one of Budgetary Position or Analytic Account is required.

Budgetary Position (account.budget.post)

Field	Technical Name	Type	Required	Description
Name	name	Char	Yes	Position name
Accounts	account_ids	Many2many	Yes	Linked accounts
Company	company_id	Many2one	Yes	Company record

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Best Practices

Budget Planning

1. Align with Academic Calendar - Match budget periods to academic years
2. Use Analytic Accounts - Track by department, program, or project
3. Include Contingency - Budget 5-10% for unexpected expenses
4. Document Assumptions - Record basis for budget estimates

Budget Monitoring

1. Review Monthly - Check variance reports monthly
2. Investigate Variance - Research significant deviations (>10%)
3. Adjust Forecasts - Update projections based on actuals
4. Communicate Early - Alert stakeholders to potential issues

Budget Control

1. Approval Workflow - Require validation before activation
2. Access Control - Limit who can modify budgets
3. Audit Trail - Use chatter for change documentation
4. Version Control - Archive original budgets before revisions

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Troubleshooting

Budget not calculating practical amount

Problem: Practical amount shows zero despite transactions.

Solutions:

1. Verify transactions are posted (not draft)
2. Check account links in budgetary position
3. Confirm transaction dates fall within budget line dates
4. For analytic budgets, verify analytic account on transactions

Line dates outside budget period

Problem: Error when adding budget lines.

Solutions:

1. Ensure line dates are within budget header dates
2. Check start date is not after end date
3. Adjust budget header dates if needed

Cannot validate budget

Problem: Validate button not working.

Solutions:

1. Confirm budget is in “Confirmed” state
2. Verify you have budget manager permissions
3. Check for validation errors in line dates

Variance not displaying correctly

Problem: Achievement percentage seems wrong.

Solutions:

1. Verify amount sign convention (positive for revenue, negative for expense)
2. Check theoretical amount calculation based on elapsed time
3. Review transaction posting dates

Missing budgetary position

Problem: Cannot find position when adding budget line.

Solutions:

1. Verify position exists in Configuration > Budgetary Positions
2. Check position has at least one account linked
3. Confirm position is for correct company

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Related Topics

• Financial Reports
• Accounting Integration
• Fee Collection
• Cash Flow Management