create a Budget for Ledger Accounts,
- Go to Gateway of Tally > Accounts
Info. > Budgets > Create
- Enter a Name for the budget.
- Select Primary in Under field.
Another Budget can be selected in this field, if sub-budget is to be
- Enter From and To date to
specify the Period of Budget.
- In Set/Alter Budgets of set Yes to Ledgers, inorder to allocate budgets for Ledger accounts.
Name: Select the names of the ledgers
for which the budget amount is to be allocated.
- Cost Centre: A budget can be created for
each ledger account pertaining to a cost centre, e.g. Purchase for
Commission group. However, if you select the option Not applicable then the budget does not apply to any particular cost centre
but for the company as a whole.
- Type of Budget: Budgets could be of two types:
Nett Transactions – This
option is used when you want to know the magnitude of transaction
amounts. Revenue items reflect the transacted amounts. Nett value is
taken because you do not expect to have a negative figure in such
accounts and if they exist, they are adjustments. E.g., an expense
account like travel will always have only debit entries unless there is a
reversal due to error or charge to a customer.
Closing Balance – This
option comes in handy when you want to monitor the balance of the
accounts and are not too keen on the transactions. For e.g., balances of
Bank Accounts or Debtors. This means that the magnitude of transactions
is ignored. You are concerned only with the amount remaining in the
account. This is useful for Balance Sheet items.
- Amount: The budgeted amount specified for the period
for a account.
the process of working on Nett Transactions, the Budget Closing Balances
actually get adjusted even if you have not selected this type. The figures in
the Profit & Loss Account will reflect the Closing Balance figures.
In order to compare
the closing balance figures in the final statements, especially in the
Balance Sheet items, viz., assets and liabilities, choose, Closing Balances.
In order to compare
the transactions against their respective budgets, especially against the
revenue income and expenses, choose 'On Nett Transactions'.