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Coupa Success Portal

Implementing Budgets

Purpose of this article is to evangelize importance of implementing budgets and provide strategy for our customers to adopt this functionality

Budget Implementation Considerations

  • ·       Budget administration is not responsibility of procurement or accounts payable departments but rather a budget control finance group that typically reports to CFO in an organization
  •      Implementing budget can give instant value in reaching your spend control goals.  Implementing budget can avoid spend exceeding authorized thresholds as well as provide visibility to budget owner in the case of justifiable exceptions for exceeding budget in some required scenarios
  • ·        For those areas that cannot be constrained for budget purposes (medicines, vaccines, health and security areas in certain industries + direct goods or critical mission goods or services), you can always decide what account GL codes (specific cost center + account combination for instance) can have a different spend control aside from budgets

Implementing budget based on your different level of readiness

Current State Suggested Approach Effort to Start and Maintain Recommendation
No current budget standardization across organization

We strongly suggest that clients at least start  with an incremental approach model using previous year's spend by cost center to estimate future budget.  You will start getting value out of more spend visibility and identify potential areas susceptible to fraud.  If you track projects within your accounting model then that could be another candidate where you can start managing budget throughout the duration of project related activities.




Once you start seeing the benefit of budget visibility at cost center level you can start using the numbers to establish future budget levels by nature of spend (account) and within smaller periods of time such as quarter or month.  Perhaps a target that could be reachable by your second year or even sooner.  Note that period configuration cannot be changed in Coupa.  So you will want to leave some flexibility and not create periods too far into the future  as you may decide to change budgeting practice from year to quarter or month, for instance.





Upload via UI loader using CSV Excel format.  No need for integration development



Start by controlling specific target cost centers or projects.  Wait to implement more granular "cost center/account" model until company adopts budget practice for spend control on a wider scale



Budget practice is standardized in some areas of organization

Budgets in Coupa allows our clients to decide which categories, processes or even areas to focus your spend control on.


So, the client might want to implement those areas from the start using already established budget by finance for a time period.  Budget period is configurable but if budget numbers are extracted from ERP financial system the most common frequency is monthly.



Upload using UI loader and adjust if needed.


In this schema the client would not use integrations.



Requirement for integrations will grow based on amount of budget records (account code combinations) that client maintains and other factors related to client's ERP and any external spend outside of Coupa against same budget





If the client is already using budgets, it´s important to understand different stages of transaction events against budget that need to be controlled and accounted for in budget management


Most common budget related events:


- Pre-commitment: requisitions in-flow pending approval

- Commitment: issued Purchase Order or Expense Report

- Executed spend:  Invoice or Expense Report approved for payment


Budget practice standardized across all levels of organization

In this mature budget compliance model client may already be using ERP or another external system to maintain and update  budget.  Integration should be looked at as a viable method to give that visibility as spend happens in Coupa

External spend transactions against budget can be brought as individual budget adjustment entries or remaining budget amount can be sent on a daily basis to keep spend in Coupa and external system synced up.  This can be supported both via flat file and API based integrations.










Since budget management is more integrations driven, the maintenance is automated on quarterly/monthly basis depending on forecast process



Utilize budget owners assignment on different cost center objects to provide visibility and control.  Also important to distinguish budget strategy between OPEX and CAPEX, especially in areas where budget is globally administered by central areas like IT, facilities, etc.  This may need coordination between groups as far as how budget periods and budget amounts are structured since you cannot have variances under one entity or Chart of Accounts in Coupa




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