Budget Control & Commitment Accounting

This guide covers PinkApple's budget management capabilities — creating budgets, tracking commitments, checking availability, and reconciling actual vs. budgeted amounts.

Overview

PinkApple supports budgetary control at the COA account level with optional commitment accounting. The budget system integrates with GL posting to provide real-time budget checking and variance analysis.

Budget Lifecycle

CREATE → APPROVE → OPEN → COMMIT → RECONCILE → CLOSE → ARCHIVE

Create Budget

1. Navigate to Administration → Financial Setup → Budgets
2. Click Create Budget
3. Define:
   • Budget name and fiscal year
   • Business unit scope
   • Budget type (OPERATING, CAPITAL, PROJECT)
   • Line items mapped to COA accounts with monthly/period allocations

Budget Line Items

Each line maps a COA account to a budgeted amount per period:

• Account: The COA account being budgeted
• Annual Amount: Total budget for the year
• Period Allocation: How the annual amount is distributed across periods (even, custom, seasonal)

Commitment Accounting

Commitments (also called encumbrances) reserve budget before actual expenditure occurs. This prevents overspending by tracking:

• Commitments: Purchase orders, contracts — funds are reserved
• Actuals: Actual GL postings that consume the budget
• Available: Budget − Commitments − Actuals

Creating Commitments

Use the Commit Budget action to reserve funds:

1. Select the budget and period
2. Specify the COA account and amount
3. Add a reference (e.g. purchase order number)
4. Submit — the commitment reduces available budget

Releasing Commitments

When a committed item is cancelled or the actual posting occurs:

1. Use Release Budget Commitment
2. Specify the commitment to release
3. The reserved amount returns to available budget

Budget Availability Check

Before processing a payment or posting, the system can check budget availability:

• Endpoint: POST /budgets/check-availability
• Parameters: budget_id, coa_id, amount, period_id
• Response: Available amount, committed amount, and whether the request would exceed budget

TIP

Budget checking can be configured as mandatory (hard stop) or advisory (warning only) via GL configurations.

Budget Reconciliation

At period-end, reconcile budgets to verify actuals align with expectations:

1. Navigate to Budgets → Reconcile
2. Select the period
3. The system auto-populates actual GL balances against budget line items
4. Review variances — investigate and document significant deviations

Variance Analysis

The reconciliation report shows:

• Budget: Originally budgeted amount for the period
• Committed: Reserved but not yet spent
• Actual: GL-posted actuals for the period
• Variance: Budget − Actual (positive = underspent, negative = overspent)
• % Utilisation: Actual / Budget × 100

Budget Operations

Operation	Description	Permission
Create/Edit	Create or modify budget definitions	UPDATE_BUDGET
Commit	Reserve budget via commitment	UPDATE_BUDGET
Release	Release a commitment	UPDATE_BUDGET
Reconcile	Run period reconciliation	UPDATE_BUDGET
Adjust	Modify allocations mid-year	UPDATE_BUDGET
Roll Over	Carry unused budget to next year	UPDATE_BUDGET
Close	Seal the budget at year-end	UPDATE_BUDGET
Archive	Archive historical budgets	UPDATE_BUDGET
Snapshot	Save a point-in-time copy	UPDATE_BUDGET

Budget Templates

For recurring budget structures, use budget templates:

1. Create a template with standard line items and allocation patterns
2. When creating a new budget, select a template to pre-populate line items
3. Adjust amounts as needed for the specific year

Integration with GL Posting

When budget control is active:

• GL posting can be configured to check budget availability before posting
• Over-budget postings can be blocked or flagged
• Budget consumption updates in real-time as journals are posted
• Budget reports reflect the latest GL activity