What are the parameters of a budget

Budget planning - overview

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Dynamics 365 for Finance and Operations has evolved into purpose-built applications that you can use to manage certain business functions. For more information about these changes, see the Dynamics 365 Licensing Guide.

This topic describes budget planning. It contains information that can help you configure budget planning and set up budget planning processes.

Overview of budget planning

An organization can configure budget planning and then set up budget planning processes to meet their organization's budgeting policies, procedures, and conditions. Understanding the concepts and terminology used in Microsoft Dynamics 365 Finance will make it easier and more effective to implement budget planning in your organization.

key terms

  • Budget planning processes - Budget planning process determine how budget plans can be updated, forwarded, reviewed and approved in the budget planning organizational hierarchy. A budget planning process is linked to a budget cycle and organization through a legal entity.
  • Budget plans - Budget plans contain the budget data for a budget cycle. You need multiple budget plans for different purposes. For example, you can use budget plans to create budget amounts for different organizational units. You can also use them to make comparisons and make informed decisions.
  • Budget plan scenarios - Budget plan scenarios define categories of data for the budget plans. You define budget plan scenarios to support money classes and other unit classes, such as quantities. Examples of monetary budget plan scenarios are "Department previous year" and "Department requests". Examples of budget plan scenarios that use quantities are “Last year's support calls” and “Counting full-time equivalents”.
  • Budget planning phases - The budget planning stages define the steps a budget plan follows from its inception to final approval. Budget planning phases are arranged in budget planning workflows.
  • Budget planning workflows - Budget planning workflows consist of budget planning phases and define these. The budget planning workflows are linked to the budgeting workflows. Budgeting workflows are the automated and manual processes that move budget plans through the budget planning phases.

Typical tasks

The following tasks can be performed with budget planning:

  • Create budget plans to define the expected income and expenses for a budget cycle.
  • Analyze and update budget plans for multiple scenarios.
  • Automatically forward budget plans along with worksheets, justification documents and other attachments for review and approval.
  • Consolidate multiple budget plans from a lower level of the organization into a single higher-level budget plan. You can also develop a single budget plan at a higher level of the organization and allocate the budget at lower levels.

Budget planning is integrated in other modules. Therefore, you can incorporate information from previous budgets, actual expenses, assets and human resources. Since the budget planning is also integrated with Microsoft Excel and Microsoft Word, you can work with the budget planning data with these programs. For example, a budget officer can export a department's budget request from a budget plan scenario to an Excel worksheet. The data can then be analyzed, updated, and presented in the worksheet and then published again in the budget plan lines.

Configure budget planning

The functionality introduced in Dynamics 365 Finance version 10.0.9 (April 2020) includes a feature that helps improve performance when you click the Publish use to update existing records in Excel and then publish back to the customer. This feature speeds up the update process and also helps reduce the chance of an update being blocked when you update many records at the same time. To make this functionality available, go to the workspace Function management Work area and turn on the function Budget planning query optimization for performance under budgeting a. We recommend that you enable this function.

The page Budget planning configuration contains most of the settings required to set up budget planning. The following sections describe some of the factors to consider when configuring budget planning. After you have completed the configuration, you can set up budget planning processes.

Budget planning scheme (optional)

An optional but recommended first step is to create a flow chart that shows your organization's process for preparing a budget. You can use any method to create this schema.

The following figure shows a generic example where separate budget planning workflows are created for different levels of the organization. Stages are defined in each workflow and specific scenarios are assigned to each stage in order to hold the budget data. The tasks are completed to move the data from one level to the next. So amounts z. B. be assigned or summarized on different accounts, permits or other reviews. In this illustration, italic text indicates a scenario that cannot be edited during the phase, or data that is historical or was approved in an earlier phase and should therefore not be changed.

The following figure shows an example where corporate headquarters estimates the base amounts for the initial budget and distributes them to the sales departments. The sales departments then estimate their forecast and send it back to headquarters, where the budget officer aggregates and adjusts the forecast. Finally, the budget officer sends the adjusted budget amounts to the Chief Financial Officer (CFO) for review, final adjustment and approval.

Organizational hierarchy for budget planning

On the website Organizational hierarchy you can define an organizational hierarchy as the budget planning hierarchy for each budget planning process. The budget planning hierarchy need not match the standard organizational hierarchy that is used for other purposes. Since this hierarchy is used to aggregate and distribute data, it should have a different structure. In the example schema, the sales departments are located below a headquarters level that includes the budget and finance departments. This structure is likely to be different from the structure used to manage operations for the sales departments. Only one organizational hierarchy can be assigned to a budget planning process.

For more information about the, see Organizations and Organizational Hierarchies.

User security

Budget planning can follow one of two security models to define user rights. To indicate the security model, lay on the side Budget planning configuration a budget planning parameter.

Budget planning workflow phases

Budget planning workflows are used in conjunction with budgeting workflows to manage the creation and development of budget plans.

A budget planning workflow consists of an ordered set of phases that a budget plan goes through. Each budget planning workflow is linked to a budgeting workflow. Budgeting workflows are one of the types of workflows that are used throughout Dynamics 365 Finance. You will guide the budget plans along with worksheets, justifications, and appendices for review and approval by the organization.

You create a budget planning workflow in the section Workflow stages the side Budget planning configuration. There you can select the phases and the budgeting workflow to be used and configure additional settings.

A best practice is to create a budget planning workflow for each level of a budget planning hierarchy. You then assign a budgeting workflow that contains elements that correspond to the stages in the budget planning workflow. In the example schema that appears earlier in this topic, one budget planning workflow is created for the sales departments and another for the head office. A budgeting workflow moves the budget plans through the various phases.

You create a budgeting workflow for budget planning on the page Budgeting workflows. The process is similar to the process of creating other workflows. The following figure shows an example of a workflow for the head office.

The workflow includes the following elements:

  • Assignment to the sales departments and aggregation of their inputs
  • Review of budget officers
  • CFO approval
  • Set up gradual transitions between the individual phases of the budget planning workflow

You assign the budgeting workflow to each budget planning workflow in the section Workflow stages the side Budget planning configuration to.

Parameters, scenarios and phases

With the first settings on the page Budget planning configuration you can create several blocks for later configuration steps:

  • parameter - Parameters define the security rules you want to apply to the budget plans and the default financial dimensions to be used when users break down the amounts in the budget plan scenarios.
  • Scenarios - Scenarios include the categories of data you want for the budget plans. You define budget plan scenarios to support money classes and other unit classes, such as quantity. In a budget plan, scenarios represent a version of the budget planning data. Examples of monetary budget planning scenarios are "Last Year Sales" and "Contracts Signed". Examples of scenarios that use quantities are "number of sales calls" and "number of full-time equivalents".
  • stages - Stages define the steps a budget plan follows from its inception to final approval. Examples of budget planning phases are “HQ Rollup”, “CFO Review” and “Final”.

Allocation schedules

In budget planning, you can assign the amounts or move quantities on the budget plan items from one scenario to another or even the same scenario. For example, you can assign amounts or quantities to the same scenario if you want to make changes to the financial dimensions or the dates of the amounts in that scenario. Allocation can be made within a budget plan or from one budget plan to another.

Allocation schedules automatically assign budget plan lines during workflow processing. You can make mappings by using one of the following methods in the list Allocation method use:

  • Distribute over periods - You use the budget distribution key to allocate budget plan items from the source budget plan scenario periods in the target scenario.


    Before you can carry out a cross-period assignment, you must have the period allocation key on the page Period breakdown categories set up.

  • Map to dimensions - The budget plan lines are assigned from the source budget plan scenario in the financial dimensions in the target scenario.


    Before you can miscalculate on dimensions, you must be on the side Budget allocation conditions Set up budget allocation conditions.

  • Merge - The budget plan items are distributed from the source budget plan scenario in assigned budget plans to the target scenario in the higher-level budget plan.

  • To distribute - The budget plan items are distributed from the source budget plan scenario in the higher-level budget plan to the target scenario in the associated budget plans.

  • Use ledger allocation rules - The budget plan items are distributed from the source budget plan scenario to the target budget plan scenario based on the selected G / L account allocation rule.

  • Copy from budget plan - You can choose a different budget plan to use as the source of the assignment.

Phase assignments

Stage allocations are used to allocate budget plan lines during workflow processing. When using tiered distributions, budget plan lines can be created and changed in the target scenario without the intervention of the budget plan creator or the auditor.

When you set up a phased allocation, you allocate the budget planning workflow and provide it with the allocation schedule. The budget planning workflow must be linked to a budgeting workflow that supports the Budget planning stage assignment Automated workflow task used. When the workflow reaches the specified stage, the assignment occurs automatically. This automated task can be used to create budget plan lines in a new scenario.

In the example schema that appears earlier in this topic, an assignment is made to move amounts from one budget plan and scenarios in the Baseline phase for headquarters to another budget plan and scenarios in the estimate phase for the sales departments . The following figure shows the relevant section of the example schema.

In addition, in the example schema, budget plans and scenarios in the “Submitted” phase for the sales departments are aggregated to a higher-level plan in the “Rollup” phase for the headquarters. The following figure shows the relevant section of the example schema.


You can optionally use the budget plan priorities to define categories and goals for the budget plans you have set up. You can also use priorities to organize, classify, and evaluate multiple budget plans. For example, you can create a budget planning priority for status and security, and then review budget plans that are assigned to that priority. You can also assign a number to your budget plans to indicate a ranking.

Columns and layouts

In a budget plan, the budget figures appear in rows and columns. You first define the columns and then you can create a layout to define the appearance of these columns.

When you define a column, you choose a budget plan scenario. The line amounts from this scenario are displayed in the budget plan. You can select a period to filter the amount, and you can also apply filters based on the ledger.

When defining a layout, choose a ledger dimension set to create the budget planning lines that you want to show, and select the columns as layout elements. You can create multiple layouts so that a budget plan shows the dates you want at different stages of the budget planning process.

In addition to the columns for budget amounts, you can define columns for the fields "Project", "Proposed Project", "Attachment" and "Suggested Attachment" from the budget plan. You can define a column for budget items. This option is useful when you need to analyze staffing budgets.

For the example schema, you could create columns for the scenarios “Annual Sales”, “Contracts” and “Forecast”. (The following figure shows the appropriate section of the schema.) You can then break any or all of these scenarios into separate columns for each quarter of the fiscal year so that the sales manager can accurately enter the forecast amounts for each period.

They also indicate whether each layout element (column) is editable and whether it is available in any worksheet template created for that layout. For the example scheme, the "Forecast" columns can be edited in the layout that is used for the "Estimation" phase, but the "PY Sales" and "Contracts" columns are write-protected.


By default, you are limited to 36 columns unless you expand budget planning by following the steps in Extend Budget Planning Layout.


In the section Layouts the side Budget planning configuration you can generate, display or upload an Excel template for each layout. These templates are the workbooks that are associated with each budget plan to provide additional analysis, charting, and data entry capabilities.

When a template is generated, the layout is locked and cannot be edited. This lock helps ensure that the format of the template matches the layout of the budget plan and contains the same data. After a template has been generated, it can be viewed and edited. You can use the template z. B. Add diagrams or further customize the display.


A template should be saved in a location that the user can access so that it can be uploaded to the layout after editing is complete. This way, the template will be used on budget plans that use the layout.


In the section Layouts you can map descriptions to indicate the name of a financial dimension included on a layout. For example, an organization might want to display the main account name next to the main account number in a budget plan. However, she may want to leave out the names of other financial dimensions so as not to clutter the display.

Establish budget planning processes

After you have finished configuring budget planning, you can start budget planning processes on the page Budget planning process set up. Budget planning processes are a set of rules that determine how budget plans can be updated, forwarded, reviewed, and approved in the budget planning organizational hierarchy.

For each budget planning process, you first select a budget cycle and a general ledger account. Each budget planning process relates to only one budget cycle and one general ledger account. You then choose the budget organization hierarchy on the tab page Managing the budget planning process and assign a budget planning workflow to all Responsibility Centers in the organization shown in the table.

To assign or change the budget planning workflow for similar Responsibility Centers, choose Assign workflow and then select the organizational type and budget planning workflow to use. The budgeting workflow ID associated with each budget planning workflow is automatically added to the table.

When you have completed the phase rules and templates on the Rules and layouts for the budget planning phase you can define a different set of rules and standard layouts for each budget planning phase. For example, the Estimate phase for the sales departments may allow users to change the lines in a budget plan but prohibit adding lines. In the Submitted phase, users can view but not add or change rows because work is complete in this phase and changes to the budget plans must be prevented. To select the layouts that are available for budget plans, choose Alternative layouts.

You can optionally set budget planning priorities on the FastTab Budget plan priority constraints choose. Priorities can then be selected on budget plans.

The last step is to activate the budget planning process from the menu Actions. A budget planning process can only be used after it has been activated.

You can also use the menu Actions to create a new process by copying an existing process. This feature is useful for organizations that follow the same process flow for each budget cycle and make little or no changes.

Another useful command in the menu activities is View budget process status. This command graphically displays the budget plans in a process, together with relevant data, such as the workflow status of the plans, summaries by amount and unit and navigation to the budget plans themselves with one click.