Budget Management In Odoo Accounting

Now as the first step , you have to create a budgetary position by going into accounting > configuration > Budgetary positions > create it. 

Budgetary positions include the list of chart of accounts (general accounts) for which you want to keep the budget, specifically income and expenses accounts.

Now you may create a budget for that accounting > accounting > budgets > create. The specify the following details while creating the budget:

1. Budget Name: The name given to the budget, which helps identify its purpose and scope.

2. Responsible: The individual or department accountable for managing and overseeing the budget.

3. Period of the Budget: The specific time frame during which the budget is valid. This typically includes a start date and an end date.

4. Budget Line: A budget line is a specific item or category within the budget that represents an allocation of funds. Each budget line corresponds to a particular expense or income.

5. Analytical Account: An optional feature used to differentiate expenses and income related to the budget from other budgets that may use the same Chart of Accounts (COA). Analytical accounts provide a finer level of detail and analysis within the budget.

6. Start Date: The date when the budget becomes active. It does not have to align with the budget period but should fall within it.

7. End Date: The date when the budget expires. Similar to the start date, it should be within the specified budget period.

8. Confirmation: The final step in the budget creation process, where the budget's details and settings are verified and officially approved.

● Planned amounts are the amount that we can define manually for this specific budget supposed to have.

● Practical amount indicates the actual amounts belongs to your related analytical account and COA will hit the journal entry

● Theoretical amount is the sum of money you potentially could have spent or ought to have gotten given the date. For illustration, let's say your budget is $1200 for the entire year (January to December) and it is the 31st of January. In that situation, since this is the actual sum that could have been made, the theoretical amount will be 100.

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You can easily access entries associated with the analytical accounts directly from the budget itself. By clicking on these entries, you can access a dedicated view specifically organized by analytical accounts. On top of that, you have the flexibility to apply filters, such as analytical plans, products and custom groups, for more detailed and customized insights. 

We can also have budget analysis by going into accounting > reporting > budget analysis.

Use-case:

Ammy Inc. is a company with multiple departments. To allocate specific budgets to each department for a defined period and gain a comprehensive financial overview, the following steps are essential:

1. Create Budgetary Positions in Odoo: Begin by establishing budgetary positions in your Odoo system. These positions will serve as placeholders for the budget allocations.

2. Create Departmental Budgets: Develop separate budgets for each department, specifying the budgetary positions and the designated period. 

3. Implement Analytic Accounts: Create unique analytic accounts for each department. These analytic accounts are linked to the department's budget and facilitate tracking expenses, invoices, and bills associated with that specific department.

4. Register Expenses, Invoices, and Bills: When recording expenses, invoices, or bills, you have the option to select the appropriate accounts and analytic accounts corresponding to the department mentioned in the budgetary positions.

5. Budgetary Analysis: At the end of the budget period, access the budgetary analysis tool to view both expenditures and income for each department. This analysis provides a clear overview of the financial performance of each department, enabling better financial management and decision-making.

Still have any queries Contact our odoo experts to know more information about managing budget in Odoo.