How to create a budget and compare it with actuals

What is it for?

The budget sets how much you expect to spend (or receive) on each analytic account in a period, usually the fiscal year. The Budget versus Actual report compares that amount with what has already been posted and shows the Deviation.

The budget creates no accounting journal entries: it is only for comparison.

When to use it?

• At the start of the fiscal year, to set the limit for each cost centre.
• During the year, to see who has already spent more than planned.
• When the budget changes mid-year: create a revision, which keeps the previous budget as Revised (see “Important notes”).
• Do not use it for expenses without an analytic account: the budget line requires an analytic account or accounting accounts, and actuals only count what has that link.

Where to find it?

• Budgets: Accounting › Review › Analysis › Budgets.
• Report: Accounting › Review › Analysis › Budget versus actual report.

Before you start

• Your profile is Accountant (create, confirm, revise, cancel and reset to draft). The Auditor can open the budgets and the report, but has no New or buttons: read only.
• The analytic accounts exist (in the example, Interno, Administração, Comercial and Operações).
• The example is Empresa Demonstração, Lda, on 01/11/2026.

How to use it

1. Open Accounting › Review › Analysis › Budgets. The list opens with the In force filter, which hides Revised and Cancelled budgets; remove the filter to see them. The list shows the budgets, with the Type, the period, the Revision number, the Total budgeted and the State. In the example there are already three Confirmed 2026 budgets: Administração (€16,000.00), Comercial (€800.00) and Operações (€17,000.00).
2. Click New. Type the name, for example Orçamento 2026 - Interno, leave Type on Annual and enter the Period start (01/01/2026) and the Period end (31/12/2026).
3. In the Lines tab, click Add a line. Choose the Analytic account (Interno) and type the amount in Budgeted (3000). Nature stays on Cost; for an amount to receive choose Income (see “Important notes”). The Theoretical, Actual, Deviation and Alert columns are calculated automatically. Instead of the analytic account you can choose accounting Accounts.
4. Click Confirm. The state changes to Confirmed and the budget can no longer be edited directly: it only has the Create revision and Cancel buttons. In the example, Theoretical €2,506.85, Actual €0.00, Deviation €3,000.00 and the Alert On track.
5. To change an amount, open the confirmed budget and click Create revision. The original budget becomes Revised and the revision opens in Draft, with Revision number 1 and the same lines. The revision is called “… (cópia)” (copy). Change what you need and click Confirm: only then does the revision go into the report.
6. Open Accounting › Review › Analysis › Budget versus actual report. In More filters, tick Unfold all. The table shows, by analytic plan and by account, the Budgeted, the Actual, the Deviation and the Deviation %. In the example, with the revision of the “Interno” budget confirmed, the Total is €36,800.00 budgeted (€33,800.00 in the “Centro de Custo” plan and €3,000.00 in the “Plano de projeto” plan), €24,495.00 actual and €12,305.00 deviation (33.44 %).
7. Click Export PDF for the paper version (it carries the company, the tax number (NIF), the period and who issued it), Export for a spreadsheet or Show chart to see the bars.

Expected result

• The budget appears in the list as Confirmed and its lines go into the report. The report amounts match those of the budget line: Operações has €17,000.00 budgeted and €12,390.00 actual on both screens.
• For a cost, the Deviation is Budgeted minus Actual; for income it is the other way round (Actual minus Budgeted). Comercial, with €800.00 budgeted and €855.00 actual, has a deviation of −€55.00, a Deviation % of −6.88 % and the Budget exceeded alert on the line.
• Theoretical is the amount that should have been spent by today, spreading the budget over the days of the period: with €3,000.00 and 305 of 365 days elapsed, €2,506.85.

Important notes

• The report only counts confirmed budgets. A budget in Draft, Revised or Cancelled is not included: when you create the revision, the original stops counting until the revision is confirmed.
• How to change a confirmed budget. The right way is Create revision (step 5): the previous budget is kept as Revised and the revision carries the Revision number, so the history is not lost. The product does, however, let you Cancel a confirmed budget. It becomes Cancelled, leaves the report (in the example, the total drops to €33,800.00 budgeted, €24,495.00 actual and €9,305.00 deviation, 27.53 %) and the Reset to draft button returns it to Draft, where it can be edited without leaving a revision; Confirm puts it back in force. Use that route only to correct a typing mistake; for a budget change during the year, create a revision.
• Income. On each line the Nature is Cost or Income. On an income line of €1,000.00 on the “Interno” analytic account with nothing received, the screen shows Theoretical €835.62, Actual €0.00, Deviation −€1,000.00 and the Behind the theoretical alert; the same alert appears on a €13,000.00 cost line on “Operações” with €12,390.00 actual, above the €10,863.01 theoretical. The label is the same in both cases: always check the amounts next to it.
• The product only lets you delete a budget in draft or cancelled.
• Actuals only with an analytic account. Expenses without an analytic account do not appear in actuals or in the deviation. The report does not show “unbudgeted” expenses: for the company's total use the income statement.

Common problems

“Invalid Operation: The budget “…” has no lines. Add at least one analytic account before confirming it.”

• Cause: you clicked Confirm without any line.
• What to do: click Close, add a line in the Lines tab and Confirm again.

“Some required fields are empty. Fill in the fields marked in red to be able to save.”

• Cause: the Period start or the Period end is missing.
• What to do: fill in both dates in the dd/mm/yyyy format and click Confirm.

“A budget line needs an analytic account or at least one account…”

• Cause: when saving, there is a line with neither an Analytic account nor Accounts. The screen calls it a Validation Error and says “otherwise there is nothing to compare the budget with”.
• What to do: click Close, choose the analytic account (or the accounts) on the line, or delete the blank line.

The budget I created does not appear in the report

• Cause: the budget is in Draft or has been Revised, or the report period does not cover it.
• What to do: confirm the budget (or the revision) and check the report period.