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Use of Balance Sheet Account in Budget

I noticed currently, budgets cannot be created for accounts other than Expense or Income accounts.
Please is there a reason why this is so?

(on version 11)

As per the standard accounting principles, budget is set to control cash flow against expenses/debits, not for income or assets. Hence, ERPNext doesn’t allow budgeting for balance sheet accounts.
On a side note, if you are looking forward to set sales target for the company, you can use the Monthly Sales Target field in Company master

So @jaichavan How does one budget to buy an asset? Given that asset is a balance sheet account. If it is not supported in ERPNext, what would be an alternative way of budgeting for it? Our company has a strict policy of everything being bought based on a pre-established budget.

If you buy an asset, then you will create a purchase receipt or invoice for it, right? At that time expense account will hit and budget will be validated. Ensure that you have created the budget as per your requirement. In this case, add the expense account in the account list in the Budget.

Learn more about Budgeting here

Wrong @jaichavan

When you buy an asset, expense account is not hit, it is the Asset account that will be debited. And Asset accounts do not show up in the budget.

Regards

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Hi @jaichavan

This is indeed correct. Perhaps the restrictions should be removed. It is also a standard practice to set Income accounts in budgets as a way to measure variance from projected income targets/objectives

Cheers

This (budget implementation in regard to balance sheet items)is a great limitation.Sometimes I wonder whether any structured and medium sized organization uses this for their accounting because I don’t know how they will overcome such constraints.We must however be grateful for the team and the community for the wonderful product. @nabinhait has been helpful in maturing account module and plead to make it possible for non current asset to be budgeted.Thanks

Maybe we should ask…why this restriction in the first place ?? That might point this conversation in the right direction