Understanding Line Item Budgeting Concept Understanding Line Item

Understanding Line Item Budgeting Concept

Understanding Line Item Budgeting

Understanding Line Item Budgeting Step 1 The sum of the line items for every budget center in your business unit makes up your organization's entire budget. Line-item budgets include your personnel, capital, and non-personnel expenditures and revenue estimates for a defined period of time.

Understanding Line Item Budgeting Step 2 Line-item budgets are usually entered by preparers. Preparers are users at the lowest-level budget center defined for the planning and budgeting model. Preparers are responsible for preparing, modifying, and submitting a detailed line -item budget for their respective budget centers. If applicable, they also prepare, modify, and submit position and asset budgets.

Understanding Line Item Budgeting Step 3 Preparers start with a base budget that the coordinator develops.

Understanding Line Item Budgeting Step 4 This base budget is either: • Populated with proposed budget data, which is based on prior year actuals, prior year budget figures, or some other basis. • Left blank for zero-based budgeting, leaving you with the job of building your budget plan from the ground up.

Understanding Line Item Budgeting Step 5 You can check out different budget activity types per model. You may have an activity in read-write mode for position, asset, and line-item activities. When a budget user checks out an activity, that activity is locked to other users. However, other budget users can check out the activity in read-only mode. You can also check out additional activities in read-only mode.

Understanding Line Item Budgeting Step 6 With line-item budgets, you can enter fixed budget amounts into line items directly or have the system calculate budget amounts by applying methods. Each line item is assigned a method. To manually enter a budget amount for a line item, use hot key functions to enter data directly into each budget period. Hot keys are characters you enter in the hot keys column to quickly enter budget data across periods.

Understanding Line Item Budgeting Step 7 If you want to use methods to calculate budget amounts, you can choose from a set of delivered methods. For example, you can assign the Amount Per Budget Period (AMTPER) method and then enter a fixed budget amount by budget period.

Understanding Line Item Budgeting Step 8 Note that you can override the methods and method details assigned to line items in your base budget if the budget coordinator enabled override capability using the Override Control page.

Understanding Line Item Budgeting Step 9 If you have defined a ledger as your proposed budget that combines revenue and expense account types, your monetary values appear as gross amounts or summed totals. Planning and Budgeting does not recognize values by account type within the line item budgeting activity. For net income amounts, you must access the available inquiry options for line item analysis.

Understanding Line Item Budgeting Step 10 Methods can be divided into two categories, methods that require calculation and methods that do not require calculation, where the budget amounts are derived through other means. The following methods require calculation.

Understanding Line Item Budgeting Step 11 Every line within your budget has a method assigned to it. A method defines how the budget amount for the line item is calculated or derived if a calculation is not necessary. A method can have a base against which the method is applied.

Understanding Line Item Budgeting Step 12 The following methods do not require calculation.

Understanding Line Item Budgeting Step 13 In addition to a base, a method can also have an associated driver and driver parameter. Budget coordinators define the default methods and their method details (driver, driver parameter, and base) for line items in the budgeting model. The ANN% method, which is used to apply a growth rate to an historical value on an annual basis, is an example of a method that uses a driver parameter and a method base. For this method, the user defines a growth rate (driver parameter) and an historical value (method base) on which to apply the growth rate.

Understanding Line Item Budgeting Step 14 In summary, you use line-item budgets to enter budget amounts for individual revenues or expense accounts of your organization. You work with your lineitem budgets in data slices, based on your budget center definition. This increases the efficiency of the system and enables other budget users to access other data slices of the budgeting model at the same time.

Understanding Line Item Budgeting Step 15 You have successfully completed an introduction to line item budgeting. End of Procedure.