Before you create a budget

Budgets are powerful tools that you can use in financial planning and reporting. Many reports and dashboards in Sage Intacct include budget information that helps you monitor your business’s progress over the course of a year and compare actual results against your forecasted results.

Do some planning before you create your budget. How you set up your budget impacts the detail that you can view in reports. You can minimize the need to edit financial reports that use budget data. Carefully consider how to set up your budgets and how to prepare them. Most importantly, consider the following when planning your budgets:

• Reporting periods
• How often you expect to update the budget
• Number of budgets you’re using

Additionally, many organizations use Spend Management to enforce spending validation against budgets, which requires additional configuration and thought as to how you want to validate your expenses.

Prerequisites

Before you can create or import a budget, several items in Sage Intacct must be set up:

• Reporting periods to be used for budgeting: Reporting periods must exist and must have the Use for budgeting checkbox selected. Reporting periods used for budgeting are typically monthly. Also, the reporting periods used for budgeting cannot overlap.

  For example, you cannot use all the following reporting periods for budgeting in a given year because they overlap:

  • January

  • February

  • March

  • First Quarter

  Learn more about reporting periods.

• Accounts: Each account that needs a budget must exist in the chart of accounts. Learn more about creating accounts.
• Dimensions: You can use dimensions such as Location, Department, and Employee in a budget, but dimensions are not required. Learn more about planning a budget with dimensions.

Reporting periods with budgets

Budgets are typically created for reporting periods of 1 month. The monthly reporting period lets you roll up individual months to create quarterly, semiannual, and annual reports.

Depending on how you set up your budgets, you can avoid the need to create a new budget for each year. There’s no limit to the number of reporting periods included in a budget. Just add reporting periods to your budgets and retain data from the previous year. Adding reporting periods to an existing budget can minimize the need to edit financial reports later.

A single budget

Many companies develop an annual budget that remains untouched for the entire year. In this case, you can create a single budget that can be used for multiple years. Just add the reporting periods for each subsequent year to the existing budget.

Multiple budgets

In contrast, some companies use multiple budgets in a fiscal year. This could be because the company wants to revise the budget throughout the year or consider multiple forecasts.

If your company needs multiple budgets, consider that it will make the reporting process a bit more complicated. Because each financial report (such as an Actuals-to-budget report) refers to a specific budget, maintaining multiple budgets can mean that you have multiple copies of financial reports.

Even when you’re using multiple budgets in Sage Intacct, you need to have a top-level budget designated as the default. Budget entries can be made at the top level or at the entity level for all budgets.

When using multiple budgets, you have options to support efficient reporting.

Options for multiple budgets	Notes
Multiple budgets and multiple copies of financial reports	You can create multiple budgets with different Budget IDs, and then make copies of all financial reports that include budgets. After, edit each financial report to retrieve the desired budget ID. Pros: Offers the greatest flexibility if using multiple budgets. Different reports can be run during a period to display different budgets. You can even run a single report that refers to multiple budgets. Cons: Increases the number of financial reports in your company that have similar specifications, resulting in a larger list and perhaps requiring extra report management.
A default budget and copies of previous budgets for historical purposes	You can save a copy of the original budget with a new Budget ID. With this option, you can still modify the default budget without affecting existing financial reports. For example, you have a budget called Current Budget that's used in your financial reports. When you want to revise the budget amounts, make a copy of Current Budget and name it Old Budget. Then make the desired changes to Current Budget so that your reports reference this updated information. Pros: Requires only 1 copy of your financial reports, because each report continues to reference the same budget ID. Cons: You can only consider and report on a single budget at any given time. To save the original budget with a new name, follow the directions to Create a budget from an existing one. Be sure to select the option to create a new budget from an existing one.

Accounts with budgets

It's possible to budget for both income statement and balance sheet accounts, although many companies include only income statement accounts in the budget.

Income statement accounts

Income statement accounts are reported as the activity for the reporting period, and can be described as "for the period." Enter the budgeted activity for the period as the budget entry.

For example, the budget amount for an income statement account is 4,000 for January, 4,000 for February, and 4,000 for March. The reported amount for the monthly period of March is 4,000, and the amount for the first quarter is 12,000.

Balance sheet accounts

Intacct reports balance sheet amounts as of a point in time, which can be described as a cumulative balance as long as there's a budget amount for each period. The budget entry for a period is the change in the balance sheet account.

For example:

• The ending budget account balance for January is 2,000.

• The ending budget account balance for February is expected to be 6,000.

• The February budget amount is entered as 4,000.

Statistical accounts

Statistical accounts can also be included in a budget, and the can be defined as "for the period" or "cumulative" when they're created.

• If the statistical account is defined as for the period, enter the budget amount as the change for the period.

  For example, the opening balance for a headcount account is 243. If you expect headcount to go up by 10 in a particular month, enter 10 as the budget amount.

• If the statistical account is defined as cumulative, enter the ending balance as the budget amount. For example, the opening balance for a headcount account is 243. If you expect the headcount to go up by 10, enter 253 as the budget amount.

Dimensions with budgets

Creating a budget using dimensions offers greater flexibility and detail in reporting. While using dimensions is optional, we strongly recommend including them in the budgets for reporting purposes. For example, your company wants to compare budgeted expenses to actual expenses by location or department. If your budget does not include those dimensions, you will not be able to run this report.

Similarly, your company can track revenue by salesperson using the Employee dimension. By budgeting for revenue including the Employee dimension, you can run reports comparing budget versus actuals for each salesperson.

Any dimension that's available in the General Ledger can be used with budgets.

The following example shows budget data for a company that's including dimensions in its budget.

Example budget data for a company that's including dimensions in its budget

BUDGET_ID	ACCT_NO	DEPT_ID	LOCATION_ID	PROJECTID	ITEMID	Month ended Jan 2024	Month ended Feb 2024
Current-Budget	4010	SALES	NYC	PR-100	WEB	11000	15000
Current-Budget	4010	SALES	NYC	PR-101	LICENSE	220000	40000
Current-Budget	4010	SALES	NYC	PR-102	WEB	28000	30000
Current-Budget	6005	ADMIN	NYC			1200	1800
Current-Budget	6005	MKTG	SFR			100	120
Current-Budget	6010	ADMIN	NYC			2500	3200

You add dimension-level detail to your budget when you add details to the budget.

Budget for some accounts using dimensions and others without

You can use different dimensions for different accounts. And you can use dimensions for some accounts and not others. Your reporting needs determine the level of detail. Each account can be budgeted at a different level of detail.

Use a budget with Spend Management

Budgets associated with Spend Management must have a value, even if the value is zero. Spend Management will not validate anything left blank. Intacct assumes that you want to skip spending validation for this account. Therefore, when you want an account used for validation, and it has no budget amount, set the amount to 0. Refer to Spend Management validation for more information.