What Is Budget Management in Tally?
Budget Management in TallyPrime helps businesses plan financial goals and control spending. It allows you to create department-wise, account-wise, or cost-center-wise budgets and compare actual performance against planned values.
Budgeting ensures that business expenses remain under control and profits are maximized through timely decisions.
Step 1 — Enabling Budgets in TallyPrime
- Press F11 → Go to “Accounting Features”.
- Enable Budgets and Controls = Yes.
- Press Ctrl + A to save changes.
Step 2 — Creating a New Budget
- Go to Gateway of Tally → Accounts Info → Budgets → Create.
- Enter Budget Name (e.g., “2025 Marketing Budget”).
- Select Period (From: 01-Apr-2025 To: 31-Mar-2026).
- Select the Group, Ledger, or Cost Center for which you want to set a budget.
- Enter the Planned Amounts for income or expenses.
You can create separate budgets for departments, branches, or cost centers to get detailed performance comparisons.
Step 3 — Setting Controls on Budgets
Once a budget is created, you can control transactions to ensure spending does not exceed the allocated amount.
- Go to Ledger Creation or Alter → Enable Budget Control.
- Select the relevant Budget Name.
- Set the Control Type:
- Lower Limit – Minimum target to achieve (for income).
- Upper Limit – Maximum limit (for expense).
Step 4 — Viewing Budget Reports in TallyPrime
| Report Name | Menu Path | Description |
|---|---|---|
| Budget Variance Report | Display → Statements of Accounts → Budgets | Shows the difference between actual and budgeted figures. |
| Ledger Budget Report | Display → Account Books → Ledger → Press Alt+F5 | Compares individual ledger performance against budget. |
| Group Budget Summary | Display → Group Summary | Shows consolidated budget and actuals for account groups. |
Step 5 — Example: Marketing Department Budget
Suppose a company sets a ₹2,00,000 annual budget for marketing. During the year, the actual expense is ₹1,80,000.
| Ledger | Budget (₹) | Actual (₹) | Variance (₹) |
|---|---|---|---|
| Advertising | 1,00,000 | 90,000 | +10,000 |
| Events | 60,000 | 55,000 | +5,000 |
| Digital Marketing | 40,000 | 35,000 | +5,000 |
| Total | 2,00,000 | 1,80,000 | +20,000 (Under Budget) |
Result: The Marketing department stayed within the budget — great control!
Step 6 — Benefits of Budget Management in Tally
- Track performance vs target instantly.
- Identify overspending and underutilized funds.
- Improve planning for future financial years.
- Integrate budgets with cost centers for detailed analysis.
Step 7 — Common Mistakes and Fixes
| Issue | Cause | Solution |
|---|---|---|
| Budget report not showing | Budgets not enabled | Enable budgets in F11 Accounting Features. |
| Ledger missing in variance report | Ledger not linked to budget | Assign budget to that ledger manually. |
| Incorrect comparison period | Wrong date range selected | Match report period with budget duration. |