Purpose
The Budget module allows users to create and manage financial budgets, projecting future revenues and expenses based on historical data and anticipated changes. It provides a comprehensive tool for financial planning and performance tracking, enabling comparison between budgeted projections and actual results throughout the fiscal year.
Budget Baseline: Budgets use the previous year's December ending balances as the baseline for projections. The Budget +/- percentage you enter is applied to this baseline to calculate monthly projections for the new fiscal year.
List View
View and manage all stored budgets by fiscal year
| Field | Definition |
|---|---|
| Accounting Period | The fiscal year for which the budget is created (e.g., 2024, 2025). |
| New Budget | Name or identifier for each budget entry. Allows multiple budgets per fiscal year for scenario planning. |
| Field | Definition |
|---|---|
| Search Field | Allows searching for specific budgets by year or name. |
| + Button | Creates a new stored budget. Opens a dialog to specify the fiscal year and budget name. |
Selected Record View
View and edit budget projections for each ledger account
| Column | Definition |
|---|---|
| Ledger Account Categories | Hierarchical list of revenue and expense accounts from the Chart of Accounts (e.g., 4000 Sales, 4040 Intercompany Professional Fees). Main categories can be expanded to show subcategories for detailed budgeting. |
| December - [Previous Year] | Ending balances for each ledger account as of December of the previous year. This serves as the baseline for calculating budget projections. |
| Budget +/- | User input field for positive or negative percentage increase per each ledger account. Enter the expected percentage change from the baseline (e.g., +10 for 10% increase, -5 for 5% decrease). |
| Monthly Columns | Projected totals for each month (e.g., January 2024, February 2024). Calculated by applying the Budget +/- percentage to the December baseline. |
| Actual | Real financial data pulled from TRUE Accounting's Income Statement and/or Profit and Loss Report. Updates automatically as transactions are posted. |
| Variance | Measures the change between budgeted and actual amounts. Positive variance indicates over-budget (expenses) or under-budget (revenue); negative variance indicates the opposite. |
Click the Filter icon to access display options:
| Option | Definition |
|---|---|
| Show All Budget Items | Reveals or hides ledger accounts that do or do not contain a budget item. Useful for focusing only on accounts with budget entries. |
| Show Items with Values | Reveals or hides ledger accounts that do or do not contain values. Filters out zero-balance accounts for cleaner display. |
Frequently Asked Questions
Common questions about creating and managing budgets
Creating & Managing Budgets
- Navigate to Financial > Journal > Budget.
- Click the + Button in the list view.
- Select the Accounting Period (fiscal year) for the new budget.
- Enter a Budget Name to identify this budget (e.g., "2025 Operating Budget").
- Click Save to create the budget.
- The system will populate the December [Previous Year] column with ending balances as your baseline.
- Enter percentage adjustments in the Budget +/- column for each account.
Yes, you can use an existing budget's percentage adjustments as a reference for a new budget:
- Open the existing budget you want to reference.
- Note or export the Budget +/- percentages for each account.
- Create a new budget for the upcoming fiscal year.
- Apply similar percentage adjustments based on your historical budget.
The December baseline will automatically update to the most recent year's ending balances, and your percentage adjustments will calculate new projections based on this updated baseline.
- Open the budget from the Budget List View.
- Locate the account you want to adjust in the Ledger Account Categories column.
- Expand parent categories if needed to find specific accounts.
- Click in the Budget +/- column for that account.
- Enter the percentage adjustment (positive for increase, negative for decrease).
- The monthly projection columns will automatically recalculate based on your adjustment.
Yes, you can create multiple budgets for the same fiscal year to compare different scenarios:
- Conservative Budget: Create a budget with lower growth assumptions for cautious planning.
- Aggressive Budget: Create a budget with higher growth targets for optimistic scenarios.
- Base Budget: Create a budget based on historical trends as your baseline scenario.
Each budget will have its own Budget Name, making it easy to distinguish between scenarios when reviewing them in the list view.
Budget vs. Actual Analysis
- Open your budget from the Budget List View.
- Review the Actual column, which pulls real financial data from TRUE Accounting.
- Compare the Actual column against the monthly projection columns.
- Check the Variance column to see the difference between budgeted and actual amounts.
- Use the Filter icon to show only items with values for a cleaner comparison.
Understanding Variance: A positive variance typically indicates over-budget for expenses or under-budget for revenue. A negative variance indicates under-budget for expenses or over-budget for revenue.
The Actual column updates automatically as transactions are posted to TRUE Accounting. However, for effective budget management:
- Monthly Review: Review budget vs. actual at least monthly after closing the accounting period.
- Quarterly Analysis: Conduct deeper variance analysis quarterly to identify trends.
- Mid-Year Adjustment: Consider creating a revised budget mid-year if actual performance significantly deviates from projections.
Tip: The Actual column pulls data from the Income Statement and P&L reports. Ensure all transactions are posted before reviewing budget performance to get accurate actual figures.
The Budget module uses the same hierarchical structure as your Chart of Accounts:
- Main Categories: Top-level accounts (e.g., 4000 Sales) can be expanded to show subcategories.
- Subcategories: Detailed accounts nested under main categories (e.g., 4010 Product Sales, 4020 Service Revenue).
- Flexible Budgeting: You can enter Budget +/- percentages at any level - either for main categories or individual subcategories.
- Roll-Up Totals: Parent category totals automatically include the sum of all child accounts.
This allows for high-level budgeting when you want simplicity, or detailed account-level budgeting when you need precision.