When enterprises use bottom-up budgeting, they build organization-level budgets by consolidating budget amounts from lower-level sources. In bottom-up budgeting, you can define the organization-level cost budget by consolidating the approved cost budgets for all projects owned by the organization. Similarly, you can define the organization-level revenue budget by consolidating all project revenue budgets.
Bottom-up budgeting enables project managers to define budgets for controlling and monitoring individual project costs and revenues, and provides financial managers with an organization-level view for reporting purposes.
Additional Information: When you use bottom-up budgeting, budgetary control is not enforced. Bottom-up budgets are implemented primarily to send budget journals to Oracle General Ledger. Oracle General Ledger performs the funds check against the GL budget.
Define bottom-up integration for your projects if you want to consolidate your project budget amounts automatically to create organization-level budgets. To use bottom-up integration, you must use Oracle General Ledger to store and maintain your organization-level budgets.
To use bottom-up budget integration, you need to do the following:
Define your organization-level budgets in Oracle General Ledger.
Define budget integration for your projects.
Enter project budget amounts and generate accounts for each project budget line.
Create baseline versions for your project budgets.
The budget baseline process validates the submitted budget version, creates a baseline version, generates accounting events, creates budget journal entries in final mode for the accounting events in Oracle Subledger Accounting, and validates the budget amounts against an organization-level Oracle General Ledger budget.
Import budget journal entries in General Ledger.
You run the process PRC: Transfer Journal Entries to GL to transfer budget journal entries from Oracle Subledger Accounting to Oracle General Ledger.
Note: The baseline process updates funds balances in Oracle General Ledger. The process PRC: Transfer Journal Entries to GL does not affect funds balances.
Review and post the budget journal entries to add the project budget amounts to the organization-level budget balances.
When you submit the process PRC: Transfer Journal Entries to GL, you can optionally choose to have the process post the journal entries. Otherwise, you can manually post the journal entries in Oracle General Ledger.
For information on implementing budget integration, see: Implementing Budget Integration, Oracle Projects Implementation Guide.
When you use bottom-up budget integration, you must define your organization-level budget or budgets in Oracle General Ledger. In Oracle General Ledger, budgets contain estimated cost or revenue amounts for a range of accounting periods. Budget organizations define the departments, cost centers, divisions, or other groups for which budget data is maintained. You assign accounts to each budget organization. You create organization budget balances by entering budget amounts for the assigned accounts.
Oracle General Ledger includes tools to create, maintain, and track budgets. See the Oracle General Ledger User's Guide for information.
You define budget integration using the Budgetary Control option from the Projects, Templates window.
You can use any project budget type to define bottom-up budget integration. For a project, you can define integration for either cost or revenue budget types, or for both types. For example, you can integrate a project cost budget with an organization-level cost budget, and you can integrate a project revenue budget with an organization-level revenue budget.
Note: If a baseline or submitted budget already exists for a project, then the budget type for the baseline or submitted budget cannot be used when defining budget integration for the project. Additionally, the organization-level budget in General Ledger must have a status of Open or Current.
When you use bottom-up budget integration, you integrate a project budget type with an organization-level budget defined in Oracle General Ledger.
You maintain budgets that you define in Oracle General Ledger are account-level budgets by account and GL period. Therefore, when you enter project budget amounts for integrated budget types, you must use a budget entry method that is time-phased by GL period, and you must assign an account to each project budget line. Oracle Projects provides a workflow process, the Project Budget Account Generation workflow, which enables you to automate the process of generating accounts for budget lines.
Note: Do not update the account for the budget line if the budget line is associated with transactions. Updating the account causes the baseline process to fail.
If you define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle Subledger Accounting overwrites default accounts, or individual segments of accounts, that Oracle Projects generates using the Project Budget Account Workflow. Oracle Projects updates the budget lines with the new accounts.
Attention: If you update account derivation rules for budgets in Oracle Subledger Accounting, then you must carefully consider the affect of the updates on existing integrated budgets. The baseline process fails if a revised account derivation rule overwrites accounts for budget lines that are associated with transactions.
For more information about the Project Budget Account Generation workflow, see: Project Budget Account Generation Workflow, Oracle Projects Implementation Guide.
When a project is set up to use bottom-up integration, the process to create a baseline version varies depending on whether you use workflow to control budget status changes.
If you do not use workflow to control budget status changes, then Oracle Projects calls the PA: Budget Integration Workflow. For information about the workflow, see: PA: Budget Integration Workflow, Oracle Projects Implementation Guide.
If you use workflow to control budget status changes, then Oracle Projects changes the budget version status to In Progress and calls the budget approval workflow. For information about this workflow, see: PA: Budget Workflow, Oracle Projects Implementation Guide. After the budget is approved, baseline processing continues for the budget version. Oracle Projects displays any rejections encountered during baseline processing in the budget approval notification. For information about the activities that take place during baseline processing, see: Creating a Baseline for an Integrated Budget.
When you create a baseline for a bottom-up integrated project budget, the budget baseline validates the submitted budget version, creates a baseline version, generates accounting events, creates budget journal entries for the accounting events in Oracle Subledger Accounting, and validates the budget amounts against an organization-level Oracle General Ledger budget.
If the baseline version is the initial baseline version for the budget, then Oracle Projects creates and validates budget journal entries for this budget version. If a prior baseline version exists, then Oracle Projects creates and validates reversal budget journal entries for the most recent baseline version and new budget journal entries for the new baseline version.
Note: If the budget fails funds validation, then the baseline process removes the accounting entries it created from Oracle Subledger Accounting and updates the submitted budget version to Rejected status.
For details about creating a baseline for a bottom-up integrated project budget, see: Creating a Baseline for an Integrated Budget.
For information about troubleshooting baseline failures, see: Troubleshooting Baseline Failures for Integrated Budgets.
After you create a baseline version for an integrated project budget, you run the process PRC: Transfer Journal Entries to GL to transfer the journal entries to Oracle General Ledger and initiate the process Journal Import in Oracle General Ledger. If the baseline version is the initial baseline version for the budget, then Oracle Projects transfers the budget journal entries it creates for this version. If a prior baseline version exists, then Oracle Projects transfers reversal budget journal entries for the most recent baseline version and new budget journal entries for the new baseline version.
Note: The baseline process updates funds balances in Oracle General Ledger. The process PRC: Transfer Journal Entries to GL does not affect funds balances.
When you submit the process PRC: Transfer Journal Entries to GL, you can optionally choose to have the process post the journal entries. Otherwise, you can manually post the journal entries in Oracle General Ledger. You can review and post the entries using the General Ledger Post Journals window.
For more information on reviewing and posting journals, see the Oracle General Ledger User's Guide.