Committed Spend and Live Budget Tracking: A Guide

Contents

1. Why budgets still surprise people
2. Three numbers, not one
3. Where commitments hide
4. Move control to the point of commitment
5. Working with budget holders
6. Quick self-assessment

1. Why budgets still surprise people

Budget holders don’t set out to overspend. They overspend because the number they’re looking at is out of date.

Most budget reports come from the ledger, and the ledger records spend when it’s invoiced. So the report shows what’s been billed, not what’s been committed: the agency signed last week, the order placed yesterday, the contract that renews next month. By the time those costs reach the ledger, the decision was made weeks ago. Month-end becomes the point where everyone finds out.

2. Three numbers, not one

Actual. Spend that’s been invoiced and posted.
Committed. Spend that’s been agreed but not yet invoiced: open purchase orders, signed contracts, approved requests.
Available. What’s really left: budget, minus actual, minus committed.

An example: a marketing budget for the quarter

	Amount
Budget	£100,000
Actual (invoiced)	£62,000
Committed (open POs and signed work)	£21,000
What the ledger report says is left	£38,000
What’s really left	£17,000

The budget holder thinks they have £38,000. They have £17,000. Every decision they make this month is based on the wrong number.

3. Where commitments hide

Where	Why finance can’t see it
Email and phone	Purchases agreed with suppliers before any PO exists
Contracts	Signed and filed, with costs that land months later
Unsubmitted expenses	Spent, but still in someone’s wallet
Card spend	Spent, but not yet reconciled
Shadow spreadsheets	Budget holders tracking their own numbers, which never reach finance

You can’t report a commitment you can’t see. So the fix isn’t a better report. It’s capturing the commitment when it’s made.

4. Move control to the point of commitment

Request, budget check, approval, commitment recorded, invoice matched. In practice:

Show the budget before approval. Every purchase request shows what it does to the available budget before anyone says yes.
Raise POs before orders. A PO raised after the invoice records history. One raised before records a commitment.
Put contracts in the system. Signed contracts become future commitments, not surprises.
Apply expense policy as claims are made. Not at month-end, when the money’s spent.
Alert before the limit, not after. Tell budget holders at 75% and 90%, while they can still change course.

5. Working with budget holders

Budget holders are better at managing spend than finance gives them credit for, when they have the right number. Give them their live position, and the monthly conversation changes from “why did this happen?” to “what’s coming up?”.

Before	After
Month-end variance hunts	Month-end confirms what everyone already knew
Shadow spreadsheets	One number everyone trusts
Forecasts built on actuals	Forecasts built on actuals plus commitments
Finance chasing budget holders	Budget holders checking their own position

Still asking budget holders the same questions every month? Start with 10 questions to ask budget holders before month-end (PDF), and give them the month-end budget holder checklist.

6. Quick self-assessment

Tick the statements that are true for you.

Budget holders can see their available budget without asking finance
Reports include committed spend, not just invoiced spend
Purchase requests show budget impact before approval
Most POs are raised before the order is placed
Contracts are recorded as future commitments
Budget holders get alerts before they hit their limit
Month-end variances are rarely a surprise

Five or more? You’re ahead of most. Fewer than three? Start with committed spend: it’s the biggest gap between the report and reality. To see how joined up your spend data is across systems, try the Spend Connectivity Score, or read Five systems, one record.

With Webexpenses Budgets, every commitment is measured against the right budget before it is approved, with alerts before the limit and a live view by department, project or entity.