Budgets and spending: user guide

How to set monthly operating and capital budgets in Sempya CloudERP, what is checked when you raise spending, what the warnings mean, and how to read the Budget Commitment report.

How budgets are set, what the system checks when you raise spending, what the warnings mean, and how to read the Budget Commitment report.

This is the user guide for the Budgets app in Sempya CloudERP. Inside the system the same guide is at Budgets → User Guide, where it also shows your company's current settings, claim types and asset categories.

Switching budget control on

Budget control does nothing for a company until it is set up: no document is checked and no warning appears. An Accounts Manager or System Manager does these steps, in this order.

1. Check the basics.
   • A fiscal year exists for every month you will budget.
   • There is a cost centre (not a group) for each department, branch or project that holds a budget.
   • Spending is recorded on expense accounts. Stock items are not checked against budgets, so things bought for use rather than for sale should be non-stock items with an expense account.
   • For capital budgets: an asset category for each kind of asset, each with its own asset account, and fixed-asset items that use them.
2. Enter the budgets. Enter and submit a Monthly Budget for each cost centre (see Entering a budget). Submitted operating budgets also switch on the standard yearly budget warnings for their accounts.
3. Create Budget Control Settings for the company:
   • leave Strict Monthly Limit unticked for now;
   • keep the documents to check ticked, or untick any you don't want checked;
   • set a capitalisation threshold if you want "possible asset" warnings (0 means none).
4. Start with warnings. Tick Strict Monthly Limit with When a Month Goes Over Budget set to Warn. For the first month or two, staff see warnings but nothing is stopped. Read the Budget Commitment report each month and correct any budget that was set wrongly.
5. Tighten when ready. Change to Block with Override (and choose the override role) or Block.
6. Tell staff where this guide is: Budgets → User Guide. It shows your company's current settings.

To switch off again, untick Strict Monthly Limit and set the capitalisation threshold to 0. The standard yearly budget warnings stay while submitted budgets exist.

Who does what

The settings (Budget Control Settings)

Entering a budget

A Monthly Budget covers one cost centre for 12 months in a row, starting from any month, so an August to July budget is one document.

1. Open Monthly Budget and click New.
2. Choose the company, the budget type (Operating or Capital) and the cost centre.
3. Set the first month and its year. With August 2026, the January to July columns mean 2027.
4. Add one row per expense account (Operating) or asset category (Capital), with an amount for each month. Leave a month at 0 if nothing is planned; a 0 month still counts as a budget of zero.
5. To use a spreadsheet: under the table click Download, fill in the file, then Upload it back.
6. Save, check the totals, then Submit. Only submitted budgets are used.

Rules the system enforces:

• Operating lines must be expense accounts of the same company; asset accounts belong in a Capital budget.
• The cost centre must not be a group, and a fiscal year must exist for every month.
• Two submitted budgets cannot cover the same account (or asset category) for the same cost centre in the same month.
• To change a submitted budget: Cancel it, then Amend, adjust and submit again.
• Operating budgets also create Sempya CloudERP's own Budget records automatically, so the standard Budget Variance Report keeps working. Don't enter those by hand for accounts you budget here.

Capital (capex) budgets

A Capital budget is set per asset category: vehicles, computers, plant and so on. It counts:

• Committed: open purchase Material Requests for fixed-asset items until they are ordered, and Purchase Orders until they are billed or received.
• Spent: anything added to the category's asset or work-in-progress accounts, whether by receipt, invoice or journal.
  • Moving work in progress into the finished asset is not new spend.
  • Returns and reversals reduce it.
  • Opening balances and disposals don't count.

For capex to be tracked, buy assets with a fixed-asset item that has an asset category, and give each category its own asset account. A work-in-progress account shared by several categories can't tell which category a direct posting belongs to; that amount counts when it is moved into a category's asset account.

When spending goes over

When you save or submit a checked document, the system works out, for each account or asset category the document touches, in the month of its document date:

already used this month (posted spend + open requests and orders) + this document, compared with this month's budget.

• Each month stands on its own: money not spent in August is not added to September.
• An order made from a request, or an invoice made from an order, replaces what it came from; it is not counted twice.
• While you are only saving a draft you get a warning, never a block, so you can fix it before submitting.
• The warning table shows the account or asset category, the cost centre, the month's budget, what is already used, this document and the amount over.

What is not counted:

• Stock items: they reach expense when issued, not when bought.
• Returns and debit notes are not checked; they reduce what is spent.
• Rejected expense claims and system postings (payroll, depreciation, revaluation, opening entries) are never checked or blocked, but postings to a budgeted expense account still count as spent.
• Accounts or months with no budget line; there is nothing to check against.

What to do about a warning or a block:

1. Check the month, cost centre and account are right. A wrong cost centre is the most common cause.
2. Reduce the amount, or move it to a later month if that is when it is really needed.
3. Ask an approver with the override role, if your company uses Block with Override.
4. If the plan has changed, ask the accounts manager to amend the Monthly Budget.

The Budget Commitment report

Open it from the Budgets workspace. Pick the company, the budget type, any date in the month, and optionally one cost centre.

"Include spend with no budget" is ticked by default and also lists accounts that have spending but no budget line; untick it to see budgeted lines only. The report uses exactly the same figures as the warnings. It differs from Sempya CloudERP's Budget Variance Report, which is cumulative for the year.

Expense claims

An expense claim is for money you have already spent yourself on company business, with a receipt: local travel, meals, tolls, airtime, small stationery, medical. It is not for paying contractors, hauliers or suppliers, and not for asking for money before spending.

• Every line needs an expense account and a cost centre; the claim type fills in the account. A claim type with no account (such as "Other") needs the account entered on the line.
• Keep claims to what you actually paid, and attach the receipt.
• Buying something that is an asset (a laptop, furniture, equipment)? Don't claim it; it must be bought with a fixed-asset item.

Expense Requests and payment vouchers

Where the Expense Request app is installed (see the Expense Requests user guide), approved requests count as committed in the Budget Commitment report until an invoice, material request or settlement claim replaces them, never twice. Where it is not installed yet, this is how spending will work once it is released:

• Requests first: money needed before spending (an advance, a supplier or contractor to pay, goods or an asset to buy) starts as an Expense Request, approved and checked against the month's budget.
• Approval posts nothing: the request shows as committed in the budget and on an "approved, not yet paid" list.
• Books move on payment: Accounts records the payment on the request (the payment voucher). The expense and the bank or cash movement are recorded together on the payment date.
• Credit suppliers are the exception: their invoice is recorded when it arrives, and paid later.
• Invoices already recorded: pay them with a "Pay recorded invoice" request (or Accounts pays them directly), never with Pay supplier. They were counted when recorded, so paying them is not counted again.
• Advances: paying one moves money to Employee Advances. The expense is recorded when you settle it with receipts, and any unspent balance is returned.

The Cashflow Forecast

The budget tells you what you planned to spend. The forecast tells you whether the money will be there when the bills land.

Open Cashflow Forecast (Reports). It shows the next 13 weeks, one row per week:

Any week that ends below zero is shown in red, and the summary names the first week the money runs out. That is the number to act on.

Two things to know about it

Overdue invoices sit in week one, not in the past. An invoice that was due in June has not gone away, so it is counted — but shown separately, because a debt 90 days old is a weaker promise than one due on Friday. If week one looks healthy only because of a large overdue figure, treat that as a warning.

Anything past the horizon is left out, not squeezed into the last week. A payment due in five months does not distort week 13.

Entering salaries, rent and loans

These are not invoices, so the system cannot know them. Add each one once under Recurring Cash Item:

• Description — "Salaries", "Rent — head office", "Bank loan repayment"
• Direction — money out (or money in, for a standing receipt)
• Amount and Frequency — monthly, weekly or quarterly
• Day of month — the day it normally leaves the bank. A salary set for the 31st automatically falls on the 30th or the 28th in shorter months.
• Ends — leave blank for ongoing; set it for a loan that finishes, so the forecast stops counting it afterwards.

What it does not do

It does not predict which customers will pay late, and it does not invent sales that have not been quoted. Everything in it is a commitment that already exists as a document, which is what makes it worth trusting.

Questions

Why was my submit stopped when there is still money left in the year? The monthly limit looks at the document's month only; unused money from earlier months does not carry forward. Move the spend to the month it belongs to, or ask for the budget to be amended.

I entered a budget but nothing is being checked. Check all of these:

• The budget is submitted.
• The strict monthly limit is on.
• The document type is ticked in Budget Control Settings.
• The line matches the document's cost centre and account (or asset category).

Why does a purchase order for stock not use the budget? Stock is an asset until it is issued, and its cost reaches expense then. Only items expensed on purchase and fixed assets are budgeted here.

Who can change the settings? Accounts Managers and System Managers, in Budget Control Settings (one record per company).