Part 4. Budget


This chapter will help you to get practical skills for corporate finance as well as your private finance management.

General principles

Budget planning is the main task of financial activity. A budget, planned correctly, will let you know exactly how much money is at your disposal and how much you can spend for certain purposes – for purchasing of new equipment for your company, to repair your house and so on. Select the categories, receipts, expenditures that you are going to include in your budget and evaluate the approximate amount of receipts and expenditures for each of the categories. You can plan you budget by presenting it in the form of a table.

When analyzing the budget, it is very important to compare the planned receipts and expenditures with actual ones. That is why there are four figures in the category's line, which allow evaluation of your budget efficiency: actual balance, planned balance, difference between them and percent of consumption. You are supposed to enter values of the planned budget only; the actual balance and the difference will be calculated based on the actual receipts and expenditures.

Create new budget group

To create a new budget group, click New budget button and select the New budget group menu item. Enter the budget's name into the Name field, select budget group type and accounts. Click Save to save changes.

To edit an existing budget, highlight it first click Tools button and select the Edit budget group menu item. A similar window will be opened, make your changes and save them by pressing the Save button.

Add new category to the budget

After creating a new budget group, you should insert some categories into it. To add new categories, highlight the required budget group, click New budget button and select the New budget item menu item.

You will see the list of categories on the screen. Mark a category you are going to include in the budget. On having specified a category, select the budget type and limit and click Save to save changes.

Set a date range for budget planning

When you have set your receipt and expenditure limits in the budget, it is time to set the interval for budget planning. Tap on Period and select required date range from the list. If you wish to set a custom period, select Date and specify the starting and ending dates in the From and To forms.

You can include scheduled transactions into your budget by clicking Tools button and selecting the Include scheduled menu item.

Budget transactions report

To see all transactions assigned to a group or single category, highlight its name, click the Tools button and select the Show Transactions menu item. A transaction report will be created.