Managing Budgets in Custodia
There are many different ways to manage your budget. Options include managing the budget based on accounting periods, such as annually, quarterly, or monthly. Alternatively, you can manage the budget based on teams or specific expense types, such as business trips, team-building activities, or IT expenses.
To get started, navigate to Finance & Accounting > Budgets > Budget.
On the Budget page, click on the orange button at the bottom right of the screen. This action will launch a dialog to set up the new budget.
On the budget dialog screen, here is a brief description of what each field means:
- Budget Granularity (Annual, Quarterly, Monthly): Determines the time frame of the budget.
- Budget Year: Specifies the fiscal year for the budget.
- Budget Quarter/Month: Required only if you are using Quarterly or Monthly granularity.
- Budget Owner: This person is responsible for approving all activity requests that draw from this budget.
- Default Ledger Account: The ledger account assigned to the budget.
- Subsidiary: Specifies which subsidiary can draw from this budget.
- Org Team: Indicates which team can draw from this budget.
- Once the budget is defined, the next step is to define the budget rules. Click on the orange button to get started.
- Once the rules have been defined, click on the green button to save the rules.
The budget rules are used to define an additional level of restrictions that determine which activities can draw from this budget. In most cases, you may want to keep it at a high level. For instance, setting it as "Any" across the board means that any activity request for any expense from any team member can draw from this activity. However, if your budget setup is more restrictive, you can add a business activity filter for business trips or IT equipment. This means only requests for business trips or IT equipment purchases will draw from this budget.
- Save the budget.
Business Rules Attributes.
- BUSINESS ACTIVITY: The Activity defined by the user.
- LINE ITEM CATEGORY: The sub category within the Activities.
- EXPENSE CATEGORY: The category defined by the merchant.
- SUBSIDIARY: Which org. subsidiary is this budget defined for?
- COST CENTER: To which cost center will this budget be connected?
- ORG TEAM: The team that will be allowed to use this budget.
- EMPLOYEE: The employees that will be allowed to utilize this budget.
- PROJECT: Limits which projects are approved for this budget.
- CUSTOMER: Defines which clients this budget may be utilized on.
- PRODUCT: Defines which products this budget may be utilized for.
- CLASS: To which cost center will this budget be connected?
Key Considerations for Managing Budgets in Custodia
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Activity Approval Flow: Define who should approve activities that draw from the selected budget and how this approval flow differs from the default company approval flow.
- Handling Insufficient Budget for New Activity Requests: What is the course of action if a new activity request exceeds the available budget? Options include declining the request or approving it, allowing the budget to go over the budget amount.