This is a method of budgeting where all expenditures must be justified each period, rather than only explaining the amounts requested in excess of budget for the previous period.

You can create budget lines for ledger accounts without referring to current balances or the results of the previous period. For each line that you create in the Ledger budget form, you can select the budget model, the ledger account, the start of the period, and the currency. You also can enter an amount or you can enter a quantity and price to create an amount on the General tab.

To create budget lines for each budget year period for the ledger account, you can use the methods in the Allocation section. In the Method field, select Period to make the Quantity, Unit, and End date fields available. Or, you can select Key in the Method field to be able to select from the period allocation keys that you create in the form. You can create period allocation keys for each ledger account if necessary. For more information, see Period allocation key (form).

To verify that all the ledger accounts are represented in the ledger budget, you can create budget lines directly from each ledger account in the chart of accounts. To create budget lines, click Chart of accounts, select a ledger account, and click Ledger budget.

This is a method of budgeting where you use recent historical transactions from the ledger accounts to create budget lines for the account. To enter transactions for each ledger account in the chart of accounts, click Ledger budget > Transfer balances. Enter information in the Transfer balances to budget form, including a percentage increase for the budget amounts, if appropriate.

When you click the OK button, one line for each date that transactions were posted to the ledger account is displayed. To see the transactions that are created, click Transactions.

After you've created basic budget lines, you can use allocation terms or settlement terms to adjust and update the budget lines over time or use the budget lines for the ledger account for the cash flow forecast. You also can update the budget transactions with a percentage increase or decrease as the period progresses, or indicate a loss of sales or debt that cannot be collected for an account in the budget.

You can also complete the following procedures in the Ledger budget form.

• To specify how the budget transactions for the ledger account should be included in the cash flow forecasts for the ledger account, click Setup > Cash flow forecast. For more information, see Set up cash flow forecasts (form).
  
• To use the ledger account budget to set up budget transactions for other accounts or dimensions, click Simulation > Allocation, and generate the budget transactions. For example, you could designate a part of the ledger budget amounts to a particular dimension value by setting up allocation terms. For more information, see Allocation (form).
  
• To transfer part of the balance of the budget account to a different account or create a budget amount for an account that is dependent on the balance of the selected account, click Setup > Settlement terms.
  

At any time, you can review the budget that you have created for each ledger account or print a budget report.

Refer to the following topics for additional information about budgets.