38 Overview to Budgeting

This chapter contains these topics:

38.1 Objectives

  • To create and assign budget pattern codes

  • To create an annual budget

  • To spread the annual amount to periods

  • To review a budget

  • To create a detailed budget

  • To create a journalized budget

  • To upload a budget from a PC

38.2 Overview

Budgeting provides a projection of future expenses and revenues. Using budget history, you can compare actual amounts to your projections and use the information to improve your budgeting process.

Budgeting consists of:

  • Working with budget patterns

  • Working with annual budgets

  • Reviewing budget comparisons online

  • Entering detailed budget amounts

  • Managing budget overages

  • Working with journalized budgets

  • Uploading budgets from a PC to the AS/400

38.2.1 What Methods of Budgeting Can You Use?

You can create a budget using one of the following methods:

Method Description
Annual budgets by business unit or account You enter annual budget amounts. Using the spread program, the system allocates budget amounts to periods based on budget pattern codes that you assign. This method directly updates the Account Balances table (F0902).
Detailed budgets by account You enter budget amounts for each account for each period. This method directly updates the Account Balances table.
Journalized budgets You enter journal entries to a budget ledger. This method updates the Account Ledger table (F0911). You must review and post to update the Account Balances table.
PC budget upload You enter amounts on a PC spreadsheet and upload the information to the AS/400. This method directly updates the Account Balances table.

You can also create budgets using the Allocations function in the General Accounting system or using FASTR.

See Also:

38.2.2 What Can You Do with Annual Budgets?

You can enter annual budget amounts and distribute (spread) them to each period as needed.

Annual budgeting includes the following steps:

  1. Create budget pattern codes (optional)

  2. Assign budget pattern codes (optional)

  3. Enter annual budget amounts

  4. Speed Amount (optional)

You assign budget pattern codes to spread annual budget amounts in different methods:

Method Description
Seasonal pattern spread If your revenues and expenses occur in a predictable pattern, you can set up seasonal pattern codes to describe each pattern. For each code, you enter the percent of the total annual budget to be spread to each period.
Equal spread If your revenues and expenses occur evenly throughout the fiscal year, you can spread the annual budget equally among the periods. For example, in a 12-month fiscal year, the system spreads 1/12th of the annual budget to each month.
No spread If you do not want to spread an annual amount to periods for an account, you can bypass spreading for that account.
Global updates to budget pattern codes You can make mass or global changes to seasonal pattern codes by account. This program updates the budget pattern codes for accounts in the Account Master table (F0901).

You can enter annual budget amounts either by business unit or by account. Entering amounts by business units creates a budget by department, location, project, and so on. Entering amounts by account creates a budget that crosses business unit boundaries.

You can have three phases (cycles) for your budget entries so that an audit trail is produced. You can use each cycle or only the final cycle. The cycles are:

  • Requested (cycle 1)

  • Approved (cycle 2)

  • Final (cycle 3)

38.2.3 Can You Enter Budget Amounts for Each Period?

You can use the detailed budget method to enter a budget amount for each period for selected accounts, or for selected periods and accounts. This method does not provide a formal audit trail, but directly updates each period budget in the Account Balances table.

38.2.4 Which Type of Budget Provides a Formal Audit Trail?

You can create a formal audit trail by creating a journalized budget that updates the Account Ledger table (F0911). Construction companies that use cost accounting and government agencies that record supplemental appropriations for the original budget typically need a formal audit trail.

Journalized budgeting consists of three steps:

  1. Enter journalized budget

  2. Review journalized budget entries

  3. Post journalized budget entries

38.2.5 Can You Use Budgets You Created in Another System?

You can create budgets using a PC spreadsheet package and transfer them to the JD Edwards World Account Balances table. You can then spread the annual budget amount to your fiscal periods.

The upload process includes the following steps:

  1. Create budget on PC

  2. Upload budget to a temporary file

  3. Pint the temporary file

  4. Define fields for Account Balances

  5. Upload fields to Account Balances

38.2.6 How Can You Review Budgets?

You can review budgets with a printed Budget Worksheet Report or online.

  • With the Budget Worksheet Report, you can:

    • Review your requested, approved, and final budgets for the next year

    • Compare budget amounts against actual amounts and projected amounts for the current year, and against actual amounts for the previous year

    • Show a projected amount and the percentage that the budget amount varies from the projected amount

  • Using online review, you can compare budget amounts to actual amounts.