Budgets

The Budgets module lets you plan and track financial targets for specific accounts on a monthly basis. By comparing budgeted amounts to actual results, you can monitor your financial performance, identify variances, and make informed business decisions.

Accessing Budgets

Navigate to Dashboard > Accounting > Settings > Budgets.

How Budgets Work

A budget entry links a specific account (from your chart of accounts) to a year and month with a planned amount. The system then compares this planned amount against the actual transactions posted to that account during that period, calculating the variance.

The Budgets List

The budgets page shows all budget entries with the following columns:

Column	Description
Account	The account from the chart of accounts that this budget applies to.
Year	The fiscal year for this budget entry.
Month	The month within the fiscal year (1 through 12).
Budget Amount	The planned/budgeted amount for this account in this period.
Actual Amount	The actual amount recorded in transactions for this account during this period.
Variance	The difference between the budget amount and actual amount (Budget - Actual).
Variance %	The variance expressed as a percentage of the budget amount.
Notes	Any notes or commentary about this budget entry.
Actions	Edit and Delete buttons.

Understanding Variance

Variance	Meaning for Revenue Accounts	Meaning for Expense Accounts
Positive	Actual revenue is below budget (underperformance).	Actual spending is below budget (savings).
Negative	Actual revenue exceeds budget (outperformance).	Actual spending exceeds budget (overspending).
Zero	Actual exactly matches the budget.	Actual exactly matches the budget.

Info: The interpretation of positive vs. negative variance depends on the account type. For expense accounts, a positive variance (spending less than planned) is generally favorable. For revenue accounts, a negative variance (earning more than planned) is favorable.

Creating a Budget Entry

Open the Add Dialog

Click the Add Budget button. A dialog window opens.

Fill In Budget Details

Field	Required	Description
Account	Yes	Select the account from your chart of accounts. You can budget for any account, though expense and revenue accounts are most commonly budgeted.
Year	Yes	The fiscal year (e.g., 2026).
Month	Yes	The month (1 for January, 2 for February, etc.).
Amount	Yes	The budgeted amount for this account in this period.
Notes	No	Any notes explaining the budget figure (e.g., "Includes seasonal marketing campaign", "Reduced due to team downsizing").

Save

Click Save to create the budget entry.

Editing a Budget Entry

Click the edit button on any budget row. The dialog opens pre-filled with the current values. Modify the fields and click Save.

Deleting a Budget Entry

Click the delete button on a budget row to remove it. A confirmation dialog appears.

Budget Planning Strategies

Annual Budget

Create 12 budget entries for each account (one per month) to establish a full annual budget:

1. Decide on your annual target for each key account.
2. Distribute the annual amount across months. You can use equal monthly amounts or adjust for seasonal patterns.
3. Create a budget entry for each month.

Incremental Budgeting

Base your budget on the previous period's actuals plus a growth factor:

1. Review last year's actual results for each account.
2. Apply an expected growth or reduction percentage.
3. Enter the adjusted amounts as budget targets.

Zero-Based Budgeting

Build your budget from scratch each period:

1. For each account, justify and plan every expenditure from zero.
2. Enter the planned amount regardless of historical spending.
3. This approach helps eliminate unnecessary costs.

Monitoring Budget Performance

During the Month

While a month is in progress:

• The Actual Amount column shows the running total of actual transactions.
• The Variance updates in real time as new transactions are posted.
• Use this to track whether you are on pace to meet your budget targets.

At Month-End

After the month closes:

• Review the final variance for each budgeted account.
• Investigate significant variances (both positive and negative).
• Add notes to budget entries explaining any unusual variances.
• Use insights to adjust future budget entries.

Common Accounts to Budget

Account Category	Examples
Revenue	Sales Revenue, Service Revenue, Interest Income
Cost of Goods Sold	Direct material costs, direct labor
Operating Expenses	Rent, Utilities, Office Supplies
Marketing	Advertising, Promotions, Events
Payroll	Salaries, Benefits, Contractor Payments
Technology	Software Subscriptions, Hosting, Equipment

Tips for Effective Budgeting

• Start with your most significant accounts -- Budget the accounts that represent the largest amounts first. You can add detail to smaller accounts later.
• Use notes liberally -- Document the reasoning behind each budget figure. This context is invaluable when reviewing variances later.
• Review variance monthly -- Do not wait until year-end to check budget performance. Monthly reviews allow timely corrective action.
• Adjust budgets when warranted -- If business conditions change significantly, update your budget entries to reflect the new reality rather than maintaining unrealistic targets.
• Align with your chart of accounts -- Your budget structure is only as useful as your chart of accounts is organized. Make sure your accounts are granular enough for meaningful budget tracking.