When it comes to how a firm does business, the budget and spending management are two critical components. Almost all organizations, large or small, will create a budget to plan for the following fiscal year. The Odoo platform supports budget planning with unique menu choices in the Accounting module. The Budget option, accessible from the Accounting menu on the Accounting module dashboard, displays all of the specifics of the Budgets that are presently being established. We will establish the Budget Name, Start Date, End Date, Responsible Person, and Status in this section. Users may filter the essential Budget from the extensive list by utilizing the Filtering and Group by option.
You can choose the Create option to bring up the creation window, as shown in the following image, to create new budgets. Here, the Budget Name, the Responsible Person, and the Operation Period, which specify the Start and End Dates, should all be stated at the outset. By choosing the Add an available line option, the Budget Lines for the specific Budget can also be defined. For the previously set budgets, you must indicate the budgetary position, analytical accounts, start date, end date, and planned amount. Additionally, while the relevant Budget is in effect, the Practical Amount, Theoretical Amount, and Achievement percentage will all be automatically described.
Furthermore, the budgetary position that we present in each budget specifies all of the accounts that are engaged in budget management.
The "Planned Amount," as mentioned, is the amount we have allocated for the specific item. The theoretical amount is the maximum amount that is expected to be made or spent from the beginning of the period to the conclusion of the budgeting period. For example, the Planned Amount for Budgetary Position in the picture below indicates income of $50,000, a period of 31 days from October 1 to October 31, and the maximum amount that may be spent or earned for each day is $50,000/31 = $1612.90. As a result, they must earn or spend $1612.90 every day. We are now on the 17th day of the budget, which is today, October 17, 2023. The Theoretical Amount for the day will be 17x$1612.90 = $27419.35. The Practical Amount is the total amount of money earned and spent up to this moment.
The success or failure of this budget is determined by the achievement. Divide the theoretical amount by the practical amount to get it. Furthermore, based on this achievement, the company may decide whether to maintain this budget or discard it.
Once the various components of the budget have been set, you may save the menu and confirm the budget. After the budget is finalized, you will have the choice to accept or cancel it, as seen in the picture below. These will be given to approved executives and management, who will evaluate the budget's components and determine whether or not to approve or cancel it.
Once the budget is approved, the platform will be operational and capable of handling the financial components. Now that we've established the budget management aspects let's move on to the next part, where the asset management aspects will be completely covered.