Budget in Tally Prime: A Complete Guide

    Introduction to Budget in Tally Prime

    • Budgeting is one of the essential features in accounting that helps businesses plan their income and expenses for a specific period. Tally Prime allows users to create, manage, and monitor budgets with ease. The budgeting feature in Tally is dynamic and supports both ledger-based and cost centre-based budgets.

    Importance of Budgeting in Business

    •  Budgeting helps businesses:
    •  Monitor financial performance
    •  Control unnecessary expenses
    •  Predict financial outcomes
    •  Allocate resources effectively
    •  Improve decision-making
    •  Set financial goals

    Features of Budgeting in Tally Prime

    •  Easy creation and alteration of budgets
    •  Budgeting for Ledgers and Cost Centres
    •  Variance reports to compare actual vs budgeted data
    •  Multiple budgets for different departments or periods
    •  Budget consolidation for group companies
    •  Printable and exportable reports

    Types of Budgets in Tally Prime

    •  Tally Prime supports two main types of budgets:
    •  Ledger-wise Budget: Set for specific accounts like Sales, Purchases, Expenses, etc.
    •  Cost Centre-wise Budget: Used for departments, branches, or projects.

    How to Create Budgets in Tally Prime

    Step 1: Enable Budgets

    •  Go to F11: Features > Accounting Features
    •  Enable Maintain Budgets and Controls

    Step 2: Create Budget



    •  Go to Gateway of Tally > Accounts Info. > Budgets > Create
    •  Enter:
    •  Name of Budget (e.g., "2024-25 Budget")
    •  Period From and To
    •  Under: Select applicable group (e.g., Primary or a department)

    Step-by-Step Example to Create Budget

    Let's assume we want to set a Sales budget of ₹10,00,000 for the year 2024-25.

    Step 1: Create Budget

    •  Name: Sales Budget 2024-25
    •  Period: 1-Apr-2024 to 31-Mar-2025
    •  Under: Primary

    Step 2: Set Ledger-wise Budget

    •  Select Ledger: Sales
    •  Enter Amount: ₹10,00,000
    •  Type of Budget: On Closing Balance or On Nett Transactions
    •  Save the budget.

    Setting Budget for Ledger Accounts

    •  Go to Gateway of Tally > Accounts Info. > Budgets > Create
    •  Choose Ledger
    •  Select ledger (like Sales, Rent, etc.)
    •  Enter budgeted amount and save.

    Setting Budget for Cost Centres

    •  While creating the budget, choose Cost Centre
    •  Set limits for departments like Marketing, Sales, Admin, etc.
    •  Helps track expenses for each unit.

    Viewing Budget Variance Reports

    •  Go to Gateway of Tally > Display More Reports > Statement of Accounts > Budget Variance
    •  Choose Ledger or Cost Centre
    •  Tally will show Actual vs Budgeted along with Variance %

    Budget and Actual Comparison

    •  This is a key feature. Tally Prime allows you to compare the actual figures with the set budget, helping management assess whether they are within the financial limits or exceeding them.

    Budget Period Configuration

    You can define budget periods as per your company’s financial year or any custom time frame (monthly, quarterly, yearly).

    Altering and Deleting Budgets

    •  Go to Budgets > Alter to make changes
    •  To delete: Press Alt+D while viewing the budget

    Multiple Budgets for Same Period

    •  Tally allows you to create multiple budgets for:
    •  Different departments
    •  Different projects
    •  For comparative analysis

    Exporting Budget Reports

    •  Budget reports can be exported in:
    •  PDF
    •  Excel
    •  XML
    •  HTML
    •  Go to the report screen > Press Alt+E to export.

    Printing Budget Reports

    •  Press Alt+P on the Budget Variance Report screen
    •  Customize format, filters, and periods before printing

    Budget Control and Management

    •  Though Tally doesn’t block transactions if they exceed the budget, it allows you to:
    •  Monitor overspending
    •  Warn users through variance analysis

    Budget and Forecast: Difference

    Budget Forecast
    Based on plans Based on trends
    Usually fixed Frequently updated
    Used for control Used for prediction

    Use Cases of Budgeting

    •  Manufacturing unit tracking raw material expenses
    •  Educational institutes tracking department-wise funds
    •  NGOs managing grant allocations
    •  Corporate office monitoring travel expenses

    Tips for Effective Budgeting in Tally

    •  Set realistic targets
    •  Review budgets monthly
    •  Involve departments in planning
    •  Use Cost Centres wisely
    •  Analyze variances for corrective action

    Budget in Multi-Branch Company

    •  Use Cost Centres for each branch to set and track branch-wise budget performance. Consolidate reports at the company level.

    Advantages of Budgeting in Tally

    •  Informed decision-making
    •  Cost control
    •  Target achievement
    •  Department-wise efficiency
    •  Better financial planning

    Common Mistakes to Avoid

    •  Not enabling budget feature
    •  Not reviewing variance regularly
    •  Setting unrealistic budgets
    •  Ignoring cost centre allocations

    Security and Permissions for Budget

    •  You can restrict access to budget creation and viewing using Tally’s Security Control settings. Useful for larger teams.

    Real-Life Business Scenarios

    Example 1:

    •  A company sets a Marketing Budget of ₹1,50,000 for Q1. At the end of Q1, actual marketing expenses are ₹1,80,000. The variance report helps management control further overspending.

    Example 2:

    •  An NGO uses budgeting to ensure donation funds are spent as per plan across Health, Education, and Infrastructure cost centres.

    Conclusion

    •  Budgeting in Tally Prime is a powerful yet easy-to-use feature. Whether you’re running a small business or managing a multi-branch enterprise, Tally's budgeting feature helps you monitor financial health, control expenses, and stay aligned with your business goals.
    •  By leveraging ledger-wise and cost centre-wise budgets, and comparing them with actuals using variance reports, you can ensure your financial strategy stays on track. It's more than just a feature—it's a strategic tool for success.


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