Comparing Actuals vs. Budget Reports in Tally Prime
Tally Prime provides a convenient way to compare actual financial performance with predefined budgets. This feature helps businesses track deviations and make informed decisions. In this article, we will guide you step by step to compare actuals with budget reports using a real example.
Step-by-Step Guide
Step 1: Define Budgets
Before comparing actuals with budgets, ensure you have created budgets in Tally Prime. Follow these steps:
Go to Gateway of Tally > Accounts Info > Budgets.
Create a budget and allocate amounts to groups, ledgers, or cost centers.
For example:
Group: "Indirect Expenses" - ₹500,000
Ledger: "Advertisement Expenses" - ₹100,000
Cost Center: "Marketing Team" - ₹200,000
Step 2: Record Actual Transactions
Ensure actual financial transactions have been recorded in Tally Prime. For example:
Expense recorded under "Indirect Expenses": ₹480,000
Expense recorded under "Advertisement Expenses": ₹120,000
Expense recorded under "Marketing Team": ₹180,000
Step 3: View Budget Variance Report
Go to Gateway of Tally > Display More Reports > Budgets & Controls.
Select Budget Variance.
Choose the budget you want to compare, e.g., "Marketing Budget 2024".
Select the desired period, e.g., 1-Apr-2024 to 31-Mar-2025.
The report will display a comparison of actuals against budgets.
Step 4: Analyze the Report
In the Budget Variance Report, you will see the following columns:
Budgeted Amount: The predefined budget amount.
Actual Amount: The recorded actual expenses or incomes.
Variance: The difference between the budgeted and actual amounts.
% of Budget: The percentage of the budget utilized.
For example:
Category
Budgeted Amount (₹)
Actual Amount (₹)
Variance (₹)
% of Budget
Indirect Expenses
500,000
480,000
20,000
96%
Advertisement Expenses
100,000
120,000
-20,000
120%
Marketing Team
200,000
180,000
20,000
90%
Step 5: Interpret the Results
From the above table, you can identify the following:
Indirect Expenses are within the budget.
Advertisement Expenses exceeded the budget by ₹20,000.
Marketing Team expenses are under the budget by ₹20,000.
This analysis helps you take corrective actions to manage costs effectively.
Conclusion
Comparing actuals with budgets in Tally Prime is an essential tool for financial management. It allows businesses to monitor their performance and control deviations. By following the steps outlined above, you can generate detailed budget variance reports and ensure financial discipline within your organization.