During times of global economic uncertainty, financial leaders turn to a budget to better control costs and compare actuals to forecasted revenues and expenses. Most budgeting processes are performed near year-end, compiled in Excel, and closely held within an Organization’s Accounting and Finance Departments. Sure, compiling a budget in Excel is a great start, but what if there was functionality out there that allowed for your budget processes to be collaborative with organizational leaders? What if that same functionality controlled the budgeting process, ensuring review and approval by key stakeholders? Last, what if that budgeting functionality also allowed users to know immediately if their planned expenditure is included in the budget?

Thanks to the Budgeting Module in Dynamics 365 for Finance and Operations (D365FO), we can “level up” our budgeting through the use of Basic Budgeting, Budget Planning, and Budget Controls. In this post, we will review the starting phase of Budgeting in D365FO: Basic Budgeting.

What is Basic Budgeting?

What is Basic Budgeting, and how does it differ from what your company is doing now in Excel? Basic budgeting allows for budgeting by GL account and financial dimensions, optional workflow approvals for budgets, use of budget control, and out-of-the-box reporting of budget versus actuals. We will start with how Basic Budgeting is utilized in D365FO.

After your Organization’s initial setup of budget parameters and steps, budget owners can upload their existing Excel budget into a budget register entry. The budget register entry lines contain approved amounts classified by date, main account, and optional financial dimensions. Below are screenshots of how budget register entries are transferred to D365FO via Excel, and how D365FO presents budget register entries following upload:

Budget Register Entry creation in Excel

Budget Register Entry creation in Excel

Budget Register Entry published in D365FO

Budget Register Entry published in D365FO

Utilize Dynamics 365 F&O for Your Budget

After your budget register entry is uploaded and updated, we can utilize the system to control several factors related to the budget. You can control budgeted amounts by financial dimension (for example, department), time (fiscal period, year-to-date, etc.), and source document (PO, General Journal, AP Invoice Journal, etc.). You can also choose whether budget controls create a warning or a hard stop against posting. Last, you can define which user groups can post entries outside of established budget tolerances. If a user group is not allowed to exceed defined budget amounts, they may request a revision to the budget to be reviewed by the Budget Manager.

Example of Error for Expenditures Entered in Excess of Budgeted Amounts

Example of Error for Expenditures Entered in Excess of Budgeted Amounts

Example Budget Request for Budget Revision

Example Budget Request for Budget Revision

Budget vs. Actuals

The last piece related to Basic Budgeting is reviewing Budget versus Actuals and utilization of the Ledger Budgets and Forecasts Workspace. This workspace gives Budget Managers and other Stakeholders to the budget process to see details such as amounts over expense threshold, amounts under revenue threshold, purchase orders over budget, and more:

View of Ledger Budgets and Forecasts Workspace

View of Ledger Budgets and Forecasts Workspace

From the workspace, an Actuals vs. budget inquiry can be performed. This inquiry is available by period, and there are several out-of-the-box reports available in Financial Reports.

Actuals vs. Budget Inquiry

Actuals vs. Budget Inquiry

This blog has covered lots of functionality that can be utilized with just a small amount of configuration. If your company wants to “level up” from Excel budgeting by introducing Budget Control, Analytics, and Reporting, sa.global can help you get set up! Contact us for more information today.