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Table of Contents (Online Help)

Create Budget

Before you create budgets in Loan Performer, you have to do the following in their order and then you can go ahead to define your budgets:

1. Set the Start of Financial Year under System->Configuration->Accounting->Accounts Settings.

2. Define the GL accounts for each Income and Expenditure item that you want to budget for in the Chart of Accounts.

3. Define the Budget Categories.

4. Define the Budget Items.

5. Link each Budget Item to the respective Ledger Account in the Chart of Accounts.

1. Set the start of the financial year

To set the start of financial year you go to System->Configuration->Accounting->Accounts Settings:

To create budgets you go to Accounts->Budgeting->Create budgets and a screen will be displayed as follows:

2. Define GL accounts for each income and expenditure item that you want to budget for

To define the GL for the items that you want to budget for you click on the Accounts button. This takes you to the Chart of Accounts where you can then create the income and expenditure GLs:

3. Define Budget Categories

These represent a grouping of related types of expenditures and incomes. Under each header category you can also register sub categories. "ADMINISTRATION" is an example of an expense category and "FEES CHARGEABLE" is a typical income category. This section enables you to register the budget categories of your organisation.

Click on the budget categories button to display the Budget Categories window as follows

4. Define Budget Items

These represent the authorized income and expenditure items in your organisation. They are defined by a reference number, a label and an indication of whether the budget item is an income or expense. This section enables you to register the budget items.

Note that the Ref. No. represents the different levels in which the items will be displayed later on in the budget report.

To create budget itemsclick on the Budget Item button to display the Budget Report configuration window as follows:.

Note that Budget items can group several accounts. For instance you can have different sales accounts, but one budget item “Sales”. Once the budgets items have been defined, you should link the GL accounts to the budget items. You can do this either by clicking on the button “Accounts” as seen above or by going directly to the Chart of Accounts. Click on the relevant account and link the account to a budget item. Then click the “Update” button.

5. Link each budget Item to the respective ledger account in the chart of accounts

Click on the Accounts button. This will take you to the Chart of Accounts where you can define the GL, e.g., "540011 - (Support staff wages)" to which each budget item will be linked.

From the Budget item drop down select the budget item to link to this particular GL account, e.g., "Support Staff Wages".

Note that these budget items should already have been defined under the Budget Items section above.

Once the budgets items have been created, you can then go ahead to enter the budget amounts on the right side of the window.

How to create budgets

To create budgets you go to Accounts->Budgeting->Create budgets and a screen will be displayed as follows:

Note that this window will display empty fields if no budget items have been created.

• Choose a budget:. From the created budget items, click to select the item for which you want to enter the budgeted amount, e.g., "Support Staff Wages". It will be highlighted in red.
  

Note that if the budget for the specified budget item and year already exists, you will see the budgeted amounts for every month. You can then modify the budgeted amounts.

If you change the year and no budget has been defined for that later year, a new button becomes available, saying “= Last Year”:

If you click on the Last Year button, the budgeted amounts for the selected item are copied from last year's budget into this year's budget. You can now modify and save them.

• Accounts: Clicking on this button takes you to the Chart of Accounts where you can define new GL accounts,
• Change Order: Click on this button to change the order in which the budget items are displayed in the window that appears above this button. The items can be ordered by the Code assigned to each budget item or alphabetically arranged by the name of the budget item
• Refresh cost centre & branch: If a new budget item is selected you need to click on this button to clear the Cost centre and Branch information for the previous budget item. This will enable you to enter fresh information for this particular item.
• Year: Select the beginning of your budget year.

Note that Loan Performer, by default, assumes that the budget/financial year starts on 1^st January for a given year. However, the budget year does not have to tally with the calendar year. In case your financial year does not start on first of January, you have to define 2 budget years.

• Cost Center: From the drop down select the cost centre for which you are preparing the budget. The cost centre should have been registered at Support files-> Cost Centers.
• Calendar Year: Enter the calendar year in which your budget starts, e.g., "2014".
• Branch: Enter the branch for which you are entering the budget. This will be applicable only if you are running a Multi Branch licence.

• Donor:

From the drop down, select the donor for whom you are making the budget.

Note that you can decide to budget for each donor by activating the “Multi-donor budgeting" option at System->Configuration->Accounting->Accounts Setting. If you don't activate this option, the Donor field will not be visible in the budgeting window.

• Increment: Decide whether you want to budget randomly or through a linear method say, 10% incremental per month. For example if you fill in an amount for January, e.g., "1,000,000" and leave the increment text box empty and then click on the Increment button, the January amount will be copied to all months.
  
  If you want to increase the budget for this item, say by "100,000" every month, then enter “+100,000” in the increment textbox and then click on “Increment” button. The budget will be increased by 100,000 for all the subsequent months. The same can be done with a minus sign for a uniform budget decrease or a percentage sign (or a combination of both).
  

Note that the fill down option only works on the amount entered in the month of January. You can also separately enter different amounts for each month.

• Remarks: In this text box enter the description or purpose of the budget that you are entering.
• Cumulated for all budgets: This column indicates the running total for the year. It gives the total of the budgeted income and expenses. If the net amount is positive, the color is green. If the net amount is negative, it becomes red. The last field shows the end of year planned profit or loss.
  

Note that a color change from green to red indicates that the planned income is not sufficient to meet the planned operational expenditure.

Click on the Save button to save the item budget and continue with the next budget item

You can print out a budget report from Accounts->Budgeting->Budget Report. This reports shows actual versus budgeted amounts per budget item for a specific month and actual versus budgeted amounts for the year to date.

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