Manage project financials using budget codes

Overview

You can manage your project financials using budget codes to give you a more structured, detailed view of where money is going on a project. By organizing costs and revenues by phase, cost code, and cost type, budget codes help you track actuals more accurately, compare them against your budget, and make better financial decisions to protect project profitability.

Who use

Things to know

• You must have your work breakdown segments already defined before you can perform the tasks described here. For more, see Budget Codes overview.

• We recommend you have your cost code and cost type assigned to your pricebook items to accurately track your expenses. For more, see Assign cost codes and cost types to your pricebook items.

Assign cost types to GL accounts

You can assign a cost type directly on the GL account to ensure job cost is captured and categorized properly if no budget code is assigned to a pricebook item.

To assign a cost type to a GL account:

1. On the top toolbar, click Settings .

2. In the side panel, click Accounting > General Ledger Accounts.

3. In the General Ledger Accounts settings screen, find the GL account you want to assign a cost type to.

4. Click the Action > Edit.

5. On the Edit GL Account screen, select a Cost Type from the dropdown.

6. When finished, click Save.

Assign budget code to Application for Payment

You can assign budget codes to an Application for Payment (AFP) to associate billed amounts to specific parts of the project budget so you can track progress billing and forecast remaining revenue accurately.

When you assign a budget code while completing an Application for Payment:

• The budget code for AFP invoice items is pulled from the estimate line item budget code

• The budget code for retainage is based on the budget code configured in the Application for Payment settings screen. See the section below for more information.

• A project invoice not associated with an AFP does not automatically receive a budget code. You can manually assign budget code on the invoice record but it will not override the item level budget code.

Configure cost code and cost type for retainage

Before you can assign a budget code to an Application for Payment, you must configure a cost code and cost type to categorize retainage withholding accurately.

To do this, go to Settings > Accounting > Application for Payment, then select the cost code and cost type in the Budget Code field. When you’re finished, click Save.

Assign budget code to Application for Payment

To assign a budget code to an Application for Payment:

1. Go to the project you want to complete an Application for Payment for.

2. Click Actions > Add Application for Payment.

3. At the pop up, select Use budget code.

4. Select the budget code segments you want to use in the Segments field.

   Note: You must include at least one segment in this field to continue.

5. Click Continue to complete the Application for Payment.

The budget codes are now included in the Schedule of Value line items in the Continuation Sheet.

Edit the budget code to an invoice and invoice line items

You can edit the budget code at the invoice level to ensure uncoded items are tied to the job budget if no budget code is assigned to the pricebook item. The Budget Code assigned at the invoice record only applies if no budget code exists for the invoice item in the pricebook.

Note: The Budget Code dropdown only appears on invoices associated with projects.

Assign a budget code to an invoice

1. Search for and go to the invoice record.

2. On the invoice record, click Update invoice details.

3. On the Update Invoice Details screen, select the Budget Code from the dropdown.

4. When you’re finished, click Save.

Assign a budget code to an invoice line item

1. Search for and go to the invoice record.

2. On the invoice record, find the invoice line item you want and click Edit /image .

3. On the edit screen, assign a Budget Code from the dropdown.

4. When you’re finished, click Save.

How budget codes apply to requisitions

Budget codes entered when creating a PO, receipt, bill, or credit are used only for auxiliary costs such as shipping, taxes, and discounts. Since these charges aren’t tied to specific items, assigning a budget code ensures they’re still tracked in the project budget. Individual items, such as materials and equipment, use their own budget codes, usually set in the Pricebook, and aren’t affected by the general code applied during the requisition process.

For non-PO bills and credits, you can assign budget codes at any point in the purchasing process, starting from the requisition all the way through to the final vendor bill. The budget code carries over as each step is created, but if you update it later in an earlier step, it won’t change the steps that were already created. 

For example, if you create a receipt from a purchase order, the budget code from the PO will carry over to the receipt, but if you change the budget code on the PO afterward, it won’t update the receipt. 

You can assign budget codes to non-PO vendor bills and credits to associate costs not tied to a requisition to the project budget. This helps you track actual spend accurately and maintain visibility into committed costs.

For more on assigning budget codes through the purchasing or inventory process, see Track budget costs in inventory transactions.

Assign budget code to non-PO vendor bills and credits

1. On the navigation bar, click Accounting.

2. In the side menu, click Bills or Credits.

3. If you’re editing a bill or credit: 

   1. Find the bill or credit you want to edit and click the Bill No. or Credit Number.

   2. In the bill or credit record, click Actions > Edit.

4. If you’re creating a new bill or credit, click Create Bill or Create Credit.

5. In the create or edit screen, select the cost code and cost type in the Budget Code field.

   Note: The Budget Code field only appears if there is a project associated with the bill or credit.

6. When you’re finished, click Save.

Track Budget vs Actual with budget codes

You can use budget codes to track budgeted versus actual costs and revenue by segment, giving you a detailed view of project performance directly in the Budget vs Actual table.

For a high-level summary of your project’s overall financial performance, use the project financials dashboard. For more, see Understand project financials.

View Budget vs Actual by segment

1. Go to the project you want to view.

2. In the side panel, click Financials.

3. In the Budget vs Actual section, click Segments.

View Budget vs Actual by cost code or cost type

Use the View By option to filter the Budget vs Actual table by segment, cost code, or cost type.

Want to learn more?

• See Budget Codes overview

• See Work in Progress (WIP) Active Projects Report

• See Track budget costs in inventory transactions

• See Understand Budget vs Actual

• See Complete Application for Payment and Continuation Sheet