Budget |Income /Expenses Accounting

The annual budget is a tool that allows you to plan income and expenses in advance for the year, providing a clear view of the future and helping you make the best decisions. During the year, you can compare the budget with the actual values (actuals) to assess how reality aligns with your planning. 

Thanks to the budget, you can:

• Make informed decisions: understand whether conditions allow you to invest in a project or if it's better to cut some expenses.
• Monitor financial performance: by comparing budget and actuals, you can easily see if you're spending more or less than planned.
• Manage responsibly: for associations, organizations, and small businesses, it is also a tool of transparency and good management.

How to set up the budget in Banana Accounting

There are two available methods:

1. Annual budget in the Accounts or Categories table
   A very simple and traditional method:
    
   • Enter the budget values directly in the Budget column of the Categories table.
     More information is available on the Budget in column page.
      
   • In the Accounts table, you can also add additional columns to manage different types of budgets.
     A useful case is adding a column dedicated to the next year's budget, so you can plan the future while staying in the current year's accounting file.
     More details are available on the page Budget for the next year in the current accounting.
      
2. Full financial planning using the Budget table
   This is a more advanced and detailed approach:

• You activate the Budget table and enter forecasted transactions not only for costs and revenues but also for liquidity.
• The Budget column in the Accounts table is updated automatically based on the transactions recorded in the Budget table.

This method gives you a dynamic view of financial developments, month by month or quarter by quarter, including liquidity. 

The following sub-pages explain how to manage the budget in an Income and Expenses file.
If you are using a double-entry accounting file instead, refer to the section on budgeting by clicking the following link: https://www.banana.ch/doc/en/node/10211.

Comparison+between Budget in column and Budget in the Table Budget

Here below is a comparison table between the budget in column in the Accounts table and the budget in the Budget table.