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Budgeting in Sun: Introduction |
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Sun Documentation -
General Ledger
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Page 8 of 8
How are Transactions Checked Against Available Budget?
Budget Checking at the transaction level is carried out if the Over Expenditure Check option is selected in Ledger Setup (LS). Then, when actual ledger transactions enter Financials, the budget checking process validates each transaction to ensure it meets the budgetary controls set.
Budget checking begins by finding the budget check definition for the account referenced on the transaction.
If the account is not covered by a budget check, the transaction is accepted without budget checking.
If a budget check applies to the account, the budget check definition identifies the budget account, and any optional analysis codes, that contain the budget for the account.
Budget checking calculates the remaining budget available on the account to see whether there are sufficient funds available to meet the transaction. The available funds check compares the actual expenditure to date for the account against the budget. If commitment checking is set in the budget check definition, the commitment total for the account is added to the actual expenditure to date and compared against the budget.
The Ledger Entry process checks each individual transaction as you enter it, to ensure it doesn't exceed the available budget for the account. In addition, the posting process ensures that the total of the transactions in a journal posting to an account, does not exceed the available funds and produces a warning if necessary.
If the expenditure amount exceeds the available budget, the budget tolerance percentage or amount defined on Ledger Setup (LS) is taken into account. If the budget deficit is within the tolerance allowed, the expenditure is allowed.
Miscellaneous Permissions Setup allows operators to override the overspend warning and post journals despite an insufficient budget being available.
Note: If an account balance is amended in the time between when an over commitment check is made and the account is updated with the transaction being checked, an account can become over committed.
Finding the Budget Check for an Account
A Budget Check definition identifies the budget account that must be checked for the account referenced on the transaction. The budget checking process looks for the most appropriate budget check definition for the account.
It begins by looking for a budget check that relates solely to the account referenced on the transaction. If it doesn't find one, it searches for a budget check that has been defined for a range of accounts that includes the account on the transaction.
This allows you to exclude selected accounts from the total budget defined for an account range. For example, you may have a total budget allocated to advertising which includes a large amount for TV advertising. You could set up a specific budget check for the TV advertising expense account and enter the budget allocated to this account alone. You could then set up another budget check for the remaining advertising accounts. The account range assigned to this budget check may reference the TV advertising account but this doesn't matter. When a transaction is entered for the TV advertising account, the checking process will use the budget check for the TV Advertising account. When a transaction is entered for any other advertising expense account, the checking process will not find a specific budget check for the account and so will use the budget check that references the range of advertising accounts.
If you create a budget check for a combination of account codes and analysis codes that has no budget, a zero budget is created. This means that every transaction posted to that combination of account codes and analysis codes is treated as an over commitment.
If you have set the Combined Budget Check option in Analysis Codes Setup (NC), transactions are posted against the most specific budget available. If this has been exceeded, a less specific budget is used if one is available.
Note: If a transaction is reversed by a separate transaction, the reversal is made against the least specific budget available. This means that if you reverse a transaction, you may find that this does not have the opposite effect of the original transaction on available budget figures. However, amending an order in Purchasing or a provisional transaction in Financials ensures that the budget previously affected is adjusted.
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