Budgeting in Ax R2.

Organizations typically prepare an operating budget that spans one or two years, and a capital budget that spans multiple years. An operating budget might include a spending plan for continuing services and short-term initiatives. A capital budget might include a spending plan for asset acquisitions and construction projects.

Generally there are 2 different approaches that are followed for maintaining the Budget:

  •  Top – Down Approach: As the names suggest the Top-Down approach is followed when the budgets are defined at the organizational level & further bifurcated into different levels based on the organizational structure.
  • Bottom – Up Approach: Bottom-Up approach is used where the budgets are created at the smallest entity in the organizational structures (eg. departments) and later on consolidated into an overall budget. In this business scenario, budget preparation requires planning; the Budget Plans undergo different stages, reviews & approvals depending on the business requirements.

Consider a (generic) scenario where an organization requires individual departments to prepare half yearly budget plans. The process needs the budget plans to be configured & tracked in the system at different stages:

  • Draft
  • Review/Revisions
  • Finalize

In addition to this, the organization also requires an approval matrix to be incorporated during the planning process:

  • Review (To be sent for review of the Department Head)
  • Approval (To be sent to the Management for approval)

Feature Overview:

Budgeting in AX 2012 feature pack was straight forward functionality where in the users could create budget models & configure the final (approved) budget values in the system and record transactions against the budgets models.

AX 2012 R2 has come up with a new feature of budget planning. This feature helps the users to plan, configure, approve & track the budget plans.  Budget planning process is empowered with features such as maintaining the stages of budgets, budget cycles and review & approval workflows. This will help the organizations to have a better control on the budget planning process.

Feature Updates:

As discussed above the system now allows the users to maintain the budget plans with their scenarios, stages, workflows.

Following are the highlights of the major features added in AX 2012 R2:

  • Budget 1In AX 2012 R2 version the Budgeting module Area Page will have the following changes (highlighted in the screenshot):
  • The Budget Planning Configuration form acts as a placeholder for all major setups required for Budget Planning (Important features highlighted):

Budgeting > Setup > Budget Planning > Budget Plan Configuration

Budget stages can be referred to different transition phases which the budget plan goes through during its creation to the finalization. Folders option is used to determine the location where the Budget plan related attachments need to be saved.

*Impact & Business requirement of the following setups available in the Budget Planning Configuration form will be elaborated in a separate e-mail:

  • Scenarios
  • Scenario Constraints
  • Allocation Schedules
  • Stage Allocation
  • Priorities
  • Templates

Budget Cycle is used to determine the period(s) for which the budget is being planned.

Budgeting > Setup > Budget Control > Budget Cycles

Budget 2

Budget Planning Process form acts as a placeholder for defining the characteristics applicable to the budget plans. The form allows users to attach Organization hierarchy, Workflows, configure the attributes to the budget stages; which would enable users to attach sub budget plans, add/modify budget lines during the planning stage.

Budgeting > Setup > Budget Planning > Budget Planning Process

Budget Plan form:

Budgeting > Common > Budget Plans > All Budget Plans

Budget 3

AX 2012 R2 provides some batch jobs to perform different tasks the same are classified under the Periodic group. Off this the Generate Budget Register entry acts as a link between the Budget planning & the Basic Budgeting feature. The users can use this Job to create the Budget register entries against the Budget Models that are created as part of the Basic Budgeting functionality.

Budgeting > Periodic > Generate Budget Register Entry

Budget 4.png

In a nutshell, the budget planning can be maintained in the system with various stages and workflows; the budget plans can then be used to generate budget register entry against a budget model, to impact the fiscal period transactions.

Budget plans can also be generated considering the historical transactions in GL and followed by approval and budget model conversion process.

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