Budget Based on an Existing Budget: Process Activity

The following activity will walk you through the processes of preparing a budget based on an existing budget and comparing budgets.

Story

Suppose that the financial supervisor of SweetLife Fruits & Jams has to prepare an optimistic budget for 2024 based on the uploaded budget for 2023. The articles of the budget should be increased by 15%, except for the rent or lease expense that should remain the same. (Wages belong to the part of the budget that will be increased by 15%.)

Acting as the SweetLife financial supervisor, you need to update the budget in the system.

Configuration Overview

On the Enable/Disable Features (CS100000) form, the Subaccounts feature has been enabled. On the Segmented Keys (CS202000) form, the SUBACCOUNT segmented key has been defined according to the company’s business needs, as described in Subaccounts: Implementation Activity.

On the Budgets (GL302010) form, a ledger with the BUDGETOPT identifier and the Budget type has been created, as described in Budget Ledger: Implementation Activity. Also, in the U100 dataset, a ledger with the BUDGET identifier and the Budget type has been defined.

Process Overview

In this activity, you will first create a new financial year, 2024, on the Master Financial Calendar (GL201000) form and open periods for it on the Manage Financial Periods (GL503000) form. On the Budgets (GL302010) form, you will prepare a budget for 2024 based on the budget for 2023 and release it on the Release Budgets (GL505510) form. Finally, on the Budgets form, you will compare the budget for 2023 to the budget for 2024.

System Preparation

To prepare the system for creating budgets for 2024, in a tenant with the U100 dataset preloaded, do the following:

  1. Sign in to the tenant with the following credentials:
    • Username: johnson
    • Password: 123
  2. On the Company and Branch Selection menu, also on the top pane of the Acumatica ERP screen, make sure that the SweetLife Head Office and Wholesale Center branch is selected. If it is not selected, click the Company and Branch Selection menu to view the list of branches that you have access to, and then click SweetLife Head Office and Wholesale Center.
  3. As a prerequisite to the current activity, make sure you have completed Subaccounts: Implementation Activity.
  4. As a prerequisite to the current activity, make sure you have uploaded and released a simple budget for the HEADOFFICE branch on the Budgets (GL302010) form, as described in Simple Budget: Process Activity.
  5. Make sure that no budget tree has been configured on the Budget Configuration (GL205000) form. You cannot complete this activity if a budget tree has been configured.

Step 1: Creating the 2024 Financial Year and Opening Periods

To prepare the system for the creation of the 2024 budget, do the following:

  1. Open the Master Financial Calendar (GL201000) form.
  2. On the form toolbar, click Generate Calendar.
  3. In the Generate GL Calendar dialog box, which opens, make sure 2024 is selected in the From Year and To Year boxes, and click OK.
  4. Open the Manage Financial Periods (GL503000) form.
  5. In the Company box, make sure that SWEETLIFE is selected.
  6. In the Action box of the Summary area, select Open.
  7. In the To Year box, select 2024.
  8. On the form toolbar, click Process All.

Step 2: Preparing and Releasing the Sales and Production Budgets for 2024

To prepare an optimistic budget for 2024 based on the budget data of 2023, do the following:

  1. Open the Budgets (GL302010) form.
  2. In the Summary area, specify the following settings:
    • Branch: HEADOFFICE
    • Ledger: BUDGETOPT
    • Financial Year: 2024
  3. On the form toolbar, click Preload Articles.
  4. In Step 1 of the Preload Budget Articles wizard, which opens, specify the following settings:
    • Branch: HEADOFFICE
    • Ledger: BUDGET
    • Financial Year: 2023
    • Multiplier (in %): 115
  5. Click Next.
  6. In Step 2 of the wizard, leave the selection of all account–subaccount pairs, and click Next.
  7. In Step 3 of the wizard, leave the default Update Existing Articles and Load Nonexistent Articles option button selected, and click Finish.

    The system calculates the sales budget for 2024 as a 15% increase over the budget figures for 2023 kept for the HEADOFFICE branch in the BUDGET ledger.

  8. In the row with the 62900 (Rent or Lease Expense) account, enter 14,400.00 in the Amount column.

    This is the original amount of the rent expenses from the 2023 production budget, which should stay the same for 2024.

  9. On the table toolbar, click Distribute.
  10. In the Distribute Year Amount by Periods dialog box, which opens, select Evenly in the Distribution Method box, and click OK.
  11. On the form toolbar, click Save to save your changes.
  12. Open the Release Budgets (GL505510) form.
  13. On the form toolbar, click Release All.

    The Processing dialog box opens; close this dialog box when the processing is complete.

Step 3: Comparing the 2023 and 2024 Budgets

To compare the budgets for 2023 and 2024, do the following:

  1. Open the Budgets (GL302010) form.
  2. In the Summary area, specify the following settings:
    • Branch: HEADOFFICE
    • Ledger: BUDGETOPT
    • Financial Year: 2024
    • Compare to Branch: HEADOFFICE
    • Compare to Ledger: BUDGET
    • Compare to Year: 2023
  3. Review the results in the table on the form.

    As you can see, all the budget articles have been increased by 15% for 2024 except for the Rent or Lease Expense article, which stayed the same in 2024 as it was in 2023.