Essential Budget Terms for ERP Users

Annual Budget

Definition: The total amount of funds allocated by the government for an agency to spend during a fiscal year (October 1 - September 30), covering all five expenditure categories: personnel budget, operating expenditure, capital expenditure, subsidies, and other expenditures.

Example in ERP: In Saeree ERP, users can view the annual budget through the "Budget" menu, where the system displays the initial budget amount, cumulative spending, and remaining balance in real-time.

Capital Expenditure (CAPEX)

Definition: Budget allocated for acquiring fixed assets such as land, buildings, equipment, and computer systems, including construction and renovation costs. These assets have a useful life exceeding one year.

Example in ERP: When procuring computer equipment, Saeree ERP automatically deducts the amount from the capital expenditure category and records it in the fixed asset register for subsequent depreciation calculations.

Operating Expenditure (OPEX)

Definition: Budget for daily operational expenses such as office supplies, utilities (electricity, water, telephone), contracted services, travel expenses, and maintenance costs.

Example in ERP: When purchasing office supplies or paying cleaning service contracts, the system deducts from the operating expenditure budget. Saeree ERP breaks down details to sub-categories such as supplies, services, and utilities.

Personnel Budget

Definition: Budget for salaries, permanent wages, employee compensation, welfare benefits, medical expenses, and various fund contributions for agency personnel.

Example in ERP: The HR module in Saeree ERP is integrated with the budget module. When processing monthly payroll, the system automatically deducts from the personnel budget and displays the remaining balance for this category.

Subsidy Budget

Definition: Budget allocated to other agencies, organizations, or external individuals. It is divided into two types: general subsidies (can be spent as needed) and specific-purpose subsidies (must be used according to designated objectives).

Example in ERP: When an agency transfers subsidy funds to subordinate units, Saeree ERP records the transfer and deducts from the subsidy budget category, with reports showing disbursement status by recipient.

Other Expenditure

Definition: Budget that does not fall into the other four categories, such as classified government funds, court-ordered penalty payments, special Cabinet-approved expenses, and special project expenditures.

Example in ERP: Saeree ERP supports setting up separate other expenditure codes by project, enabling clear tracking of spending for each project.

Off-budget Fund

Definition: Funds received from sources other than the national budget, such as service revenue, revolving funds, donations, and foreign aid. Agencies can spend these funds according to their specific regulations.

Example in ERP: Saeree ERP clearly separates off-budget fund management from budget fund management, with distinct chart of accounts and fund source codes to prevent mixed reporting.

Revenue Fund

Definition: Funds collected or received from operations, such as fees, service charges, rent, deposit interest, and penalties. Revenue may be remitted to the treasury or retained for the agency's own use, depending on each agency's regulations.

Example in ERP: When an agency issues a receipt for service fees, Saeree ERP automatically records the revenue into the revenue account, categorized by predefined revenue codes.

Program

Definition: A group of projects organized to achieve the organization's strategic objectives and goals. It represents the highest level of the budget structure, with outputs and activities underneath.

Example in ERP: In Saeree ERP, the budget structure starts with "Program" as the first level. Users see the program code when creating any budget document.

Output

Definition: Goods or services delivered to beneficiaries, serving as performance indicators for the program. One program may have multiple outputs, such as "graduates completed" or "patients treated."

Example in ERP: Saeree ERP allows defining output codes linked to budget allocations. Every disbursement is traced back to an output, ensuring performance reports align with key indicators.

Activity

Definition: Sub-tasks performed to achieve target outputs. Activities are the lowest level of the budget structure and are directly linked to actual expenditures. One output may consist of multiple activities.

Example in ERP: When creating a Purchase Requisition (PR) in Saeree ERP, users must select the activity to charge. The system verifies whether the activity has sufficient remaining budget before approval.

Purchase Requisition (PR)

Definition: A document created by users to request procurement approval, specifying items/services, quantities, required budget amounts, and funding sources. The PR is the starting point of the procurement process in the ERP system.

Example in ERP: In Saeree ERP, users create PRs through the online system. Once all details are filled in, the system routes the PR through the approval hierarchy while automatically checking the remaining budget.

Purchase Order (PO)

Definition: A document issued to vendors after PR approval to confirm the purchase of goods/services, specifying price, payment terms, and delivery schedule. The PO serves as the purchase agreement between the agency and the vendor.

Example in ERP: Once a PR is approved, Saeree ERP automatically generates a PO and creates a budget encumbrance based on the PO amount, ensuring funds are available when it is time to disburse.

Budget Encumbrance / Commitment

Definition: Reserving budget funds for expenditures that have been committed but not yet disbursed, preventing overspending. Encumbered amounts are immediately deducted from the available balance.

Example in ERP: When a PO is issued in Saeree ERP, the system automatically encumbers the budget per the PO amount. If the PO amount changes, the encumbrance adjusts accordingly, effectively preventing budget overruns.

Disbursement

Definition: The process of drawing funds from the treasury to pay for goods/services based on payment vouchers after inspection and acceptance. Disbursement is the final step in the budget cycle.

Example in ERP: After goods inspection in Saeree ERP, the system automatically generates a payment voucher, releases the encumbrance, and records the actual expenditure in the accounting system, along with issuing a check or bank transfer.

Budget Balance

Definition: Remaining budget that has not been committed or disbursed, calculated using the formula: Initial Budget - Encumbrance - Disbursed = Budget Balance. This figure must be checked before creating any PR.

Example in ERP: Saeree ERP displays the budget balance in real-time on the Dashboard, broken down by program, output, activity, and expenditure category, enabling executives to make immediate decisions.

Budget Transfer

Definition: Moving budget funds from one line item to another to address insufficient funds in certain items. This requires approval from authorized personnel per regulations and must not affect the original objectives of the source line item.

Example in ERP: Saeree ERP has a "Budget Transfer" menu where users create transfer documents specifying source and destination items, amounts, and reasons. Once approved, the system automatically adjusts balances and maintains a complete transfer history.

Central Budget

Definition: Budget set aside centrally, not allocated to any specific agency. It is used for expenses that cannot yet be attributed to a specific agency or for urgent emergency expenses, such as salary increment funds and emergency reserve funds.

Example in ERP: Saeree ERP supports recording central budget as a separate cost center. When additional central budget is allocated, system administrators can immediately add funds to the relevant line items.

Budget Terms Summary Table

References

• Bureau of the Budget, Thailand
• Comptroller General's Department, Thailand
• Budget Procedure Act B.E. 2561 (2018)