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In PSA, a budget represents a pot of money for a specific project. Typically you might create budgets for customer purchase orders, internal budgets, outbound vendor purchase orders, and for both billable and non-billable expenses. You can create multiple budgets per project.
A budget allocation is a record that stores a customer purchase order budget, up to three internal budgets, a billable expenses budget and a non-billable expenses budget. By assigning a budget allocation to your business records, certain values on each business record (such as cost or revenue amounts) are allocated to the appropriate budget. This means that you can:
- Track the consumption of a project's budgets individually
- Alert certain users when a percentage of a budget has been consumed
- Monitor budget consumption at both project and budget level
- Include a budget's customer reference on billing events for invoicing
- Prevent individual budgets from being over-billed
The following sections give more information about each of these benefits.
Tracking an Individual Budget's Consumption
You can track the consumption of a project's budgets individually by linking them to a budget allocation. For example, a project might have a customer purchase order budget for billable work, and an internal budget for costs not billed to the customer. Both budgets are linked to a budget allocation that is assigned to milestones, timecard splits, expenses, and miscellaneous adjustments in the project. When these business records are included in financials, their billable amounts are allocated to the customer purchase order budget and any internal costs are allocated to the internal budget. PSA updates each budget to show the amount that has been consumed. This means you can always see how close the amount consumed is to the budget's amount.
For more information, see Track Consumption of Individual Budgets.
Alerting Users When a Percentage of a Budget Has Been Consumed
You can set two thresholds on a budget so that certain users are notified when the budget's consumption exceeds either of them. For example, you might want notifications to be sent when 75% of the budget amount has been consumed, and when 100% of the budget amount has been consumed. With these thresholds, if the budget amount is 12,000, PSA will send Salesforce notifications when the budget's Amount Consumed reaches 9,000 and again when it reaches 12,000.
Notifications are sent to the project manager, and to the contact identified in the project's Alert Recipient field (if populated).
For more information, see Notifying Users When Consumption of a Budget Exceeds a Threshold.
Monitoring Budget Consumption across a Project or Budget
You can view a summary of a project's budget consumption by clicking the Financials tab on the project record page. The Project Budgets grid lists budgets grouped by type. The information shown for each budget includes its amount, the amount consumed, and the difference between those two values (amount remaining). For more information about the Project Budgets grid, see Project Budgets Fields.
You can view a list of the business records that consume a budget by clicking the Consumption tab on the budget record page. Separate grids for milestones, timecard splits, expenses, and miscellaneous adjustments list the business records that are allocated to the budget. For more information about these grids, see Budget Fields.
Including a Budget's Customer Reference on Billing Events for Invoicing
Using budget allocations has the added benefit of making it easier for your customers to identify which budget an invoice relates to. This is because when you bill business records that have been allocated to a customer purchase order budget or billable expenses budget, the customer reference on that budget is passed to the resulting billing event items. Billing event items with the same customer reference are grouped into billing events. When you release those billing events to your finance system for invoicing, the customer reference on each billing event is available to be included on its corresponding invoice if the integration between PSA and your finance system supports this. This will allow your customers to relate an invoice to a specific reference such as a purchase order number.
This is illustrated in Passing Customer References through to Billing Events.
Preventing Individual Budgets from Being Over-Billed
You can avoid over-billing individual budgets by applying a billing cap to each of them. If you rely on a project-level billing cap, that will prevent the project from being over-billed but not individual budgets. For example, if a project's total bookings are 30,000 and the project includes a customer purchase order budget for the amount of 15,000, applying a project-level billing cap will prevent you from billing more than 30,000 against the project but will not prevent you from billing more than 15,000 against the customer purchase order budget. This might result in your customer rejecting invoices for amounts that exceed the 15,000 agreed for that budget.
Applying a billing cap at budget-level ensures that individual budgets are not over-billed. For more information, see Applying a Billing Cap to Individual Budgets.