> ## Documentation Index
> Fetch the complete documentation index at: https://docs.nyumbazetu.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Budgets

> Set income and cost budgets by period and account, and compare them against actuals.

**Finance → Accounting → Budgets → `/budgets`**

A budget is your plan for a period, expressed in the same accounts the ledger posts to. Once it
exists, every actual figure has something to be measured against — which is the difference between
reporting what happened and managing what happens.

## Structure

A budget is defined per **period** and per **account**, within a **branch**. Because it uses the
same [chart of accounts](/guides/chart-of-accounts) as the ledger, variance reporting needs no
mapping layer: budget and actual are already on the same axis.

## Creating a budget

<Steps>
  <Step title="Choose the period and branch">
    Budgets are branch-scoped, like everything financial.
  </Step>

  <Step title="Enter income lines">
    Base rental income on the lease book and its
    [escalation projections](/guides/charge-escalation), not on last year plus a percentage.
    Adjust for expected vacancy rather than budgeting for full occupancy.
  </Step>

  <Step title="Enter cost lines">
    Use the accounts you actually post expenses to. A budget line with no matching expense account
    can never be compared to anything.
  </Step>

  <Step title="Save">
    The budget becomes available to the budget report.
  </Step>
</Steps>

<Warning>
  The budget screen holds unsaved work — the **Not Saved** indicator tells you edits are still
  pending. Save before leaving the page.
</Warning>

## Budget report

**`/reports/budget-report`** compares budget against actual for the period, by account, with the
variance. Use it to answer:

* Which cost lines are over, and by how much?
* Is income tracking the plan, or is the gap vacancy rather than pricing?
* Is a variance timing (an invoice not yet posted) or real?

See [Reports](/guides/reports).

## Reading variances well

| Pattern                                               | Usual explanation                                                             |
| ----------------------------------------------------- | ----------------------------------------------------------------------------- |
| Income under budget, occupancy on plan                | Under-billing — leases without recurring charges, or escalations not applied. |
| Income under budget, occupancy below plan             | A letting problem, not a billing problem.                                     |
| Costs over budget in one account                      | Either a genuine overrun or miscoded expenses landing in the wrong account.   |
| Everything under budget in the first days of a period | Timing. Compare like periods, not partial ones.                               |

<Tip>
  Before treating a variance as real, check that the period's invoices and expenses have actually
  **posted**. An unposted invoice makes income look like a shortfall when it is a queue.
</Tip>

## Budgeting practice

* **Budget at the level you manage.** Per branch and per account is usually right; per unit is
  unmaintainable.
* **Reforecast rather than rewrite.** Keep the original budget for accountability and record a
  forecast alongside it.
* **Use the register and schedules.** Planned maintenance from the [asset](/guides/assets)
  register and known [escalations](/guides/charge-escalation) are the most reliable inputs you
  have.
* **Review monthly, not annually.** A variance found in month eleven is history; found in month two
  it is a decision.

## Next steps

<Columns cols={2}>
  <Card title="Financial statements" icon="chart-column" href="/guides/financial-statements">
    The actuals side of the comparison.
  </Card>

  <Card title="Expenses" icon="receipt" href="/guides/expenses">
    Where cost actuals come from.
  </Card>
</Columns>