Budgeting in AX 2009 - Overview

Budget Allocations

AX has the ability to use predefined allocation rules to perform generated allocations. Generated allocation is the distribution of posted or fixed amounts to combinations of destination accounts and dimensions at any time, for which system generates new Journal entries distributing the amount based on an allocation formula.

Allocation can be set by various methods in Ax, which includes:

- Basis

- Fixed percentage

- Fixed weight

- Spread even

The Allocation process in the system is divided into 3 segments.

• §  Ledger allocation rules definition
• §  Process Allocation request
• §  Allocation Journal.

Ledger Allocation Rules definition: - The first step in allocation is to define the allocation rules.

Creation of allocation rules requires the allocation code, allocation validity as Start Date & End Date. Then, select one of the allocation methods as fixed percentage, Basis, Fixed Weight, Spread even.

After selecting the allocation method, define the Rules for the Source Ledger account. Source Ledger accounts and dimensions can be selected where the expenses has been incurred.

Define the destination account & dimensions where the amount needs to be allocated. Also define the actual percentage or Basis based on which source amount should be allocated to destination. Once destination is defined the Ledger allocation rules are completed.

Process Allocation: -Once the Ledger Allocation rules are defined, the unique rule code will be generated. Refer the rule code in process allocation request to process the allocation entries (based on the allocation rules the system will reallocate the cost to the respective department.)

After selecting the rule code, provide start date and end date of rules and reason codes with remarks. Process the Allocation request and this generates the financial entries in allocation journal.

The allocation process collects one or more values from a source data record and distributes the totals of the values to one or more accounts or account and dimension combinations according to an allocation rule that is defined using the Ledger allocation rule form.

Allocation Journal: -Allocation journal shall show the entries passed by Process Allocation step. System would generate the entries on running the Allocation request. System shall reverse the Source Ledger a/c and book the entries against destination ledger accounts as per the allocation rule.

Budgets

Budgets are defined for each Chart of Accounts dimension wise, where dimension can be a Category/cost center/department/projects/sub department which are identified as Dimensions.

AX supports budgets to be created at the General ledger level. The budgets are maintained at the chart of account level with relevant dimension and the variance analysis will be made at the chart of account level.

Sales and Purchase Budgets:

The budgeting for sales and purchases is carried out in the Accounts Receivable & Accounts Payable module and the same will be transferred to GL. However the accounts that are affected during the transfer are only the Sales revenue accounts and the purchase inventory accounts.

The sales and purchase forecast can be entered by quantity and amount and the allocation keys will be defined to split the amount over a period of time when the forecast are transferred to GL budgets.

Budget Revisions:

There can be scenarios where the budgets are prepared and approved for the complete year, however the budgets can be revised as per the requirement. The existing budgets can be modified or a new budget created with the revised figures.