You use budget checking to identify the detail line amounts that exceed the budget for a specific job, project, department, and so forth.
Note. To work with budgets, you must enter purchase order detail lines by account numbers.
Each time you enter or change a purchase order, the system checks the account number for each detail line and compares it to the available budget for the account. If the detail line amount exceeds the available budget amount, the system places the entire order on hold. You can set a budgeting processing option in the Purchase Orders program (P4310) to provide a warning message that a detail line amount exceeds the available budget amount, but the system will still place the order on hold. The system allows no further processing of the order until you remove the budget hold. You must set up budget hold codes for each business unit.
The system calculates available budget amounts by subtracting actual amounts (AA ledger) and committed amounts (PA Ledger) from the budget amount that you specify for an account number. The system uses this budget calculation:
Available Budget = Original Budget Changes - Actual amounts spent - Commitments - Encumbrances The system uses this budget calculation for ledgers:
Available Budget = BA or JA Ledger Amounts - AA Ledger Amounts - PA Ledger Amounts
You use the processing options on the Budgeting tab from Order Entry to activate budget checking and to specify information such as:
• The budget ledger from which the system retrieves budget amounts.
• The hold code the system assigns to detail lines that exceed budget.
• The percentage by which a detail line can exceed budget before being put on hold.
• The method by which the system determines budget amounts.
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To understand budget checking, review these topics:
• Search scenarios for level of detail.
• Budget totaling.
• Calculating available budget to date for the fiscal year.
Search Scenarios for Level of Detail
When you create an account, you assign each account number a level of detail. The range for the level of detail is one through nine, with one being the highest and nine being the lowest.
You enter the level of detail in the processing option for the system to search for the available budget. This processing option also controls how the system accumulates the actual and committed and encumbered amounts for the account.
Budget Amount Accumulation Two search scenarios exist:
• If the account number that you enter on the order is the same as the budget account number, and the level of detail of this account is equal to the level of detail you enter in the processing option, the system does not roll up the budget.
The system calculates the available budget on the account. If the detail line exceeds the available budget then the system applies a budget hold to the line.
• If the account number that you enter on the order does not have the same level of detail that you enter in the processing option, and the level of detail of the account is lower than the level of detail that you enter in the processing option, the system retrieves the budget from the account whose level of detail matches the level of detail that you enter in the processing option.
Actual and Committed Amount Accumulation
If you set the budget accumulation processing option to accumulate, then the system accumulates budgets starting from the level that you enter in the level of detail processing option and continues to the lowest level of detail.
To accumulate the actual and committed and encumbered amounts for the account, the system first searches higher levels of detail in the chart of accounts. The system locates the first account number that has a level of detail that is equal to the level of detail that you enter in the processing option. This account number must be above the level of detail of the account number on the order.
The system then searches lower levels of detail in the chart of accounts to locate the first account number with a level of detail equal to the level of detail you specify in the processing option. This account number must be below the level of detail of the account number on the order.
The system then totals the actual and committed/encumbered account balances for the account range it identifies and subtracts the total from the budget ledger to determine the available budget. The system compares the available budget amount with the amount you enter on the order.
If the detail line exceeds the available budget, the system applies a budget hold to the line.
Budget Totaling
Use the Budget Total Method processing option of Purchase Order Workbench to specify how the system calculates the budget total.
The system uses these fields in the F0902 table for budgeting:
Chapter 11 Working with Purchase Orders
• BORG - the original or beginning budget.
• AN01 through AN12 - the net posting fields which contain changes in the current year.
• AYPC - the balance forward field contains the sum of the prior year’s changes, which the system rolls into the current year.
Enter 1 in this processing option for job cost accounting. The system adds the amounts in the fields. The total of these fields is the budget amount the system uses for budget checking.
Note. The original budget cannot be spread when you enter a 1 in this processing option.
Enter 2 in this processing option for Public Sector and Not-For-Profit entities. Use this method when the system spreads an original budget to the net posting fields. The system calculates the total budget from the net posting fields to use in budget checking.
Enter 3 in this processing option for Profit entities. You enter changes to the budget in the net posting fields.
The system adds the net posting fields and the original budget to determine the budget amount to use in budget checking. Use this method when an original budget is not spread to the net posting fields.
Calculation of Available Budget to Date for the Fiscal Year
Use the Period Accumulation Method processing option to specify how the system calculates the available budget.
When you enter a 1 in this processing option, the system reviews the fiscal date pattern for the company and determines the current general ledger period. The system then adds the sum of the period budget amounts from period one through the current period. The system uses this amount as the original budget for budget checking.
Enter 1 in this processing option only when you enter 2 in the Budget Total Method processing option.
Budget Review
You might want to compare the amounts you have budgeted for goods and services to the amounts that you have actually spent and to the amounts you are committed to spend in the future. For each account you can review:
• The budget amount.
• The actual amount you have spent.
• The total amount of commitments through a certain date.
• The variance between the budget amount and the amount you have spent or are committed to spend in the future.
• The transactions that have affected a certain account and the journal entries that relate to a particular transaction.
See Also
JD Edwards EnterpriseOne General Accounting 8.12 Implementation Guide, “Reviewing Balances and Transactions,” Setting Processing Options for Trial Balance/Ledger Comparison (P09210A)
Prerequisite
To work with budgets, ensure that commitments are set up and processed.
Working with Purchase Orders Chapter 11