Skip to content
New issue

Have a question about this project? Sign up for a free GitHub account to open an issue and contact its maintainers and the community.

Sign up for GitHub

By clicking “Sign up for GitHub”, you agree to our terms of service and privacy statement. We’ll occasionally send you account related emails.

Already on GitHub? Sign in to your account

Jump to bottom

Update guide-ch_budget.xml #306

Open
wants to merge 4 commits into
base: stable
Choose a base branch
from
Open

Update guide-ch_budget.xml #306

Changes from all commits
Commits
Show all changes
4 commits
Select commit Hold shift + click to select a range
8e2f3fa
Replate some itemizedlists with variablelists
usamimikamen-sk Jul 21, 2021
6e5de97
Change – to —.
usamimikamen-sk Aug 21, 2021
2a86e5d
Change <sect2> to <prcedure>
usamimikamen-sk Aug 21, 2021
e8177a8
https://github.com/Gnucash/gnucash-docs/pull/200#issuecomment-905137925
usamimikamen-sk Aug 29, 2021
File filter

Filter by extension

Filter by extension
Conversations
Failed to load comments.
Loading
Jump to
Jump to file
Failed to load files.
Loading
Diff view
Diff view
247 changes: 128 additions & 119 deletions guide/C/ch_budgets.xml
View file
Open in desktop
Original file line number Diff line number Diff line change
Expand Up @@ -20,9 +20,9 @@
<sect1 id="budget_concepts1">
<title>Basic Concepts</title>

<para>A budget is a tool for estimating expected income and expenses. You can use it to help you plan how
you intend for your finances to change over a period of time, and to examine how your actual
financial transactions for the period compare to your planned transactions.
<para>A budget is a tool for estimating expected income and expenses. It can help you plan how
you intend for your finances to change over a period of time and to examine how your actual
financial transactions for the period compared to your planned transactions.
</para>

<para>The budgeting concept is quite general, so &app; offers a budgeting tool that is both simple and
Expand All @@ -36,49 +36,55 @@
<para>There are a few helpful terms listed below that will be used to discuss budgeting.
</para>

<itemizedlist>
<listitem>
<para><emphasis>Budget</emphasis> - A financial plan describing the expected revenues and/or disbursements
for a particular time period
</para>
</listitem>

<listitem>
<para><emphasis>Cash Budget</emphasis> - A budget planning for expected cash receipts and cash
disbursements. This type of budget tracks cash flow -- where your money comes from,
where it goes, and, of course, how much.
</para>
</listitem>

<listitem>
<para><emphasis>Expense Budget</emphasis> - A budget chiefly for planning what you spend your money on.
<variablelist>
<varlistentry>
<term>Budget</term>
<listitem><para>A financial plan plan which describes the expected revenues and/or disbursements
for a particular period.</para></listitem>
</varlistentry>

<varlistentry>
<term>Cash Budget</term>
<listitem><para>A budget planning for expected cash receipts and cash
disbursements. This type of budget tracks cash flow&mdash;where your money comes from,
where it goes, and, of course, how much.</para></listitem>
</varlistentry>

<varlistentry>
<term>Expense Budget</term>
<listitem><para>A budget chiefly for planning what you spend your money on.
This type of budget tracks your expenses. It is typically not concerned with things like
appreciation or repayment of liabilities. However, it would account for interest
charges. For example, if you buy $100 worth of groceries with your credit card, you
incur an $100 expense for groceries, and a $100 liability to your credit card company.
When you pay the credit card bill for $110, you are incurring an additional interest
expense of $10. An expense budget plans for the transaction of buying the groceries and
paying the interest, but not the transaction of repaying the credit card company.
</para>
</listitem>

<listitem>
<para><emphasis>Capital Budget</emphasis> - A budget that describes a plan for paying for a large future
expense, often through a combination of saving and borrowing money. Note: Capital
budgets can sometimes get quite complex because they can try to answer the question "Can
we afford to do such-and-such?" by exploring various hypothetical scenarios that can
involve hypothetical accounts.
</para>
</listitem>

<listitem>
<para><emphasis>Budget Period</emphasis> - The period of time during which the plan is expected to take
paying the interest, but not the transaction of repaying the credit card company.</para></listitem>
</varlistentry>

<varlistentry>
<term>Capital Budget</term>
<listitem><para>A budget that describes a plan for paying for a large future
expense, often through a combination of saving and borrowing money.
<note><para>Capital budgets can sometimes get quite complex because they can try to answer the question
<quote>Can we afford to do such-and-such?</quote> by exploring various hypothetical scenarios that can
involve hypothetical accounts.
</para>
</note>
</para></listitem>
</varlistentry>

<varlistentry>
<term>Budget Period</term>
<listitem><para>The period of time during which the plan is expected to take
place. The most common budget periods are annual and monthly. Sometimes, you may budget
for several consecutive periods at once, for convenience or for finer-grained planning.
For example, an annual budget may include 12 monthly budget periods.
</para>
</listitem>
</itemizedlist>
For example, an annual budget may include 12 monthly budget periods.</para></listitem>
</varlistentry>


</variablelist>

</sect2>
</sect1>

Expand All @@ -92,95 +98,98 @@
your budget.
</para>

<sect2 id="budget_creation2">
<title>Choose Which Accounts To Budget For</title>

<para>The first step in creating a budget is to decide what it is you want to plan for. This decision will
affect which accounts you include in your budget. For example, if you are only interested in
tracking your expenses, you may create an expense budget by only entering amounts for
expense accounts. On the other hand, if you want to track all of your cash flow, you may
create a cash flow budget by entering amounts for asset, liability, income and expense
accounts.
</para>

<para>Before you begin to create your budget, you need to make two decisions: What accounts do I want to
budget for? and When do I want my budget to be for? You can always change your mind later,
after you&rsquo;ve created a budget, but you need to start with something.
</para>

<tip>
<para>As a rule of thumb, if you mostly care about <emphasis>what</emphasis> you spend your money on, you
may want to make an expense report. If you&rsquo;re also concerned about having enough
money in the right places at the right times, you may want to use a cash-flow budget.
<task>
<title>Task to Create a Budget </title>
<taskprerequisites>
<para>Before you begin to create your budget, you need to make two decisions:
<orderedlist>
<listitem><simpara><quote>What accounts do I want to budget for?</quote></simpara></listitem>
<listitem><simpara><quote>When do I want my budget to be for?</quote></simpara></listitem>
</orderedlist>
You can always change your mind later,
after you&rsquo;ve created a budget, but you need to start with something.
</para>
</tip>
</sect2>

<sect2>
<title>Choosing a Budget Period</title>

<para>Before creating a budget you must also decide what period of time you want to plan for. The most
common budget periods are monthly and annual. If you want your budget to plan for changes in
financial patterns over time, then you should include multiple budget periods in your
budget. For example, if you want to plan on having higher utility expenses in the winter
than in the summer, then you might break your annual budget into 4 quarters or even 12
months, and budget a higher value for the winter periods than for the summer periods.
</para>
</sect2>

<sect2>
<title>Getting Started</title>

<para>To create your first budget click on
<menuchoice>
<guimenu>Actions</guimenu> <guisubmenu>Budget</guisubmenu><guimenuitem>New
Budget</guimenuitem>
</menuchoice>
. You will immediately see a new budget with the default settings and no entries. Then click
on the <guibutton>Options</guibutton> button. The most important options are the budget
period and the number of periods. For the budget period, choose the beginning date and the
smallest period of time that you want to plan for. Then, for the number of periods, choose
how many periods you want to plan for.
</para>

<para>The budget page now shows a list of accounts with a column for each budget period. The date shown in
the title of each column is the beginning of that budget period.
</para>
</sect2>

<sect2>
<title>Entering Budget Values</title>

<para>Now, you must enter the budget values - the amounts that you expect the account balances to change
during the budget period. There are two ways to enter budget values. The first way is to
simply click on the cell and enter an amount.
</para>

<para>If you have past transactions recorded in &app;, the second way is to let &app; estimate the budget
values by looking at those transactions. First, select the accounts you want &app; to
estimate. Then click on the <guibutton>Estimate</guibutton> <emphasis>Toolbar</emphasis>
button. In the <guilabel>Estimate Budget Values</guilabel> dialog, select the date past
which &app; should look for past transactions. &app; will start at that date and look
forward for the duration of your budget. For example, if you are making an annual budget,
and you select Jan. 1, 2005, &app; will look at all the transactions in that account from
Jan. 1, 2005 through Dec. 31, 2005.
</para>
</sect2>
</taskprerequisites>
<procedure>
<step>
<title>Choose Which Accounts To Budget For</title>
<para>
The first step in creating a budget is to decide what it is you want to plan for. This decision will
affect which accounts you include in your budget. For example, if you are only interested in
tracking your expenses, you may create an expense budget by only entering amounts for
expense accounts. On the other hand, if you want to track all of your cash flow, you may
create a cash flow budget by entering amounts for asset, liability, income, and expense
accounts.
</para>
<tip>
<para>As a rule of thumb, if you mostly care about <emphasis>what</emphasis> you spend your money on, you
may want to make an expense report. If you&rsquo;re also concerned about having enough
money in the right places at the right times, you may want to use a cash-flow budget.
</para>
</tip>
</step>

<step>
<title>Choosing a Budget Period</title>
<para>Before creating a budget, you must also decide what period of time you want to plan for. The most
common budget periods are monthly and annual. If you want your budget to plan for changes in
financial patterns over time, then you should include multiple budget periods in your
budget. For example, if you want to plan on having higher utility expenses in the winter
than in the summer, then you might break your annual budget into 4 quarters or even 12
months, and budget a higher value for the winter periods than for the summer periods.
</para>
</step>

<step>
<title>Getting Started</title>
<para>To create your first budget click on
<menuchoice>
<guimenu>Actions</guimenu><guisubmenu>Budget</guisubmenu><guimenuitem>New Budget</guimenuitem>
</menuchoice>.
You will immediately see a new budget with the default settings and no entries. Then click
on the <guibutton>Options</guibutton> button. The most important options are the budget
period and the number of periods. For the budget period, choose the beginning date and the
smallest period of time that you want to plan for. Then, for the number of periods, choose
how many periods you want to plan for.
</para>
<para>The budget page now shows a list of accounts with a column for each budget period. The date shown in
the title of each column is the beginning of that budget period.
</para>
</step>

<step>
<title>Entering Budget Values</title>
<para>Now, you must enter the budget values&mdash;the amounts that you expect the account balances to change
during the budget period. There are two ways to enter budget values. The first way is to
simply click on the cell and enter an amount.
</para>

<para>If you have past transactions recorded in &app;, the second way is to let &app; estimate the budget
values by looking at those transactions. First, select the accounts you want &app; to
estimate. Then click on the <guibutton>Estimate</guibutton> <emphasis>Toolbar</emphasis>
button. In the <guilabel>Estimate Budget Values</guilabel> dialog, select the date past
which &app; should look for past transactions. &app; will start at that date and look
forward for the duration of your budget. For example, if you are making an annual budget,
and you select Jan. 1, 2005, &app; will look at all the transactions in that account from
Jan. 1, 2005 through Dec. 31, 2005.
</para>
</step>
</procedure>
</task>
</sect1>

<sect1 id="budget_reporting1">
<title>Budget Reporting</title>

<para>You&rsquo;ve already done the hardest part - creating your budget. But now you want to know how your
<para>You&rsquo;ve already done the hardest part&mdash;creating your budget. But now you want to know how your
actual financial transactions compare to your plan. You need to run the Budget Report.
</para>

<para>Click on
<menuchoice>
<guimenu>Reports</guimenu><guisubmenu>Budget</guisubmenu> <guimenuitem>Budget
Report</guimenuitem>
</menuchoice>
. For each account, the Budget Report will show the budgeted and the actual amounts in two
<guimenu>Reports</guimenu><guisubmenu>Budget</guisubmenu> <guimenuitem>Budget Report</guimenuitem>
</menuchoice>.
For each account, the Budget Report will show the budgeted and the actual amounts in two
adjacent columns for each period in the budget. If you have created multiple budgets, you can
use the Budget Report Options to select which budget to use in the report.
</para>
Expand All @@ -193,9 +202,9 @@
<sect2>
<title>Budgeted Income Statement</title>

<para>The budgeted income statement is similar to the income statement. Both show the revenues and
expenses for a given period as well as the profit, which is the difference revenue -
expenses. The income statement is based on historical data, but the
<para>The budgeted income statement is similar to the income statement. Both show the incomes and
expenses for a given period as well as the profit, which is the difference income &minus; expenses.
The income statement is based on historical data, but the
<emphasis>budgeted</emphasis> income statement is based on the predictions made in the
budget.
</para>
Expand Down