Income (positive) budget lines will turn GREEN and Expense (negative) budget lines will turn RED to show us that we are on track to exceed the planned amounts of the Budget.

Example:

When you create a Budget Line, you are asked to enter a PLANNED AMOUNT for the duration of your Budget Period.

This amount is then compared with the PRACTICAL AMOUNT (actual recorded income/expense) and the THEORETICAL AMOUNT (budgeted income/expense you should have right now).

Here are the Budget Lines for a 2020 Annual Budget that includes $41,000 for Income and $18,000 for Expenses.

Since we are looking at this Budget in November, you can see in the THEORETICAL AMOUNT that we should have $35,720.55 in Income by now and should have $15,682.19 in Expenses by now - in order to be on track to meet the budgets amounts.

We are VERY CLOSE - 94% and 99% respectively. 

Both lines are black to indicate that we are not YET on target to exceed the budget.

If we change the budgeted amount to $40,000 of Income instead, look what happens:

The line turns green, because we are on track to exceed the $40,000 - we should have $34,849.32 by now and we actually have $35,448.18.  If we keep going the way we are, we will probably end up with 101.72% of the budget or $40,688.00 of Income.  It is GREEN because exceeding an Income budget is GOOD.

If we change the budgeted amount to $17,000 of Expenses instead, look what happens:

The line turns red, because we are on track to exceed the $17,000 - we should have $14,810.96 by now and we actually have $15,599.99.  If we keep going the way we are, we will probably end up with 105.33% of the budget or $17,906.10.  The line is RED because exceeding an Expenses budget is BAD.

Income (positive) budget lines will turn GREEN and Expense (negative) budget lines will turn RED to show us that we are on track to exceed the planned amounts of the Budget.

The time that these lines change color is generally when you want to take special action - such as thinking about extra incentives for your Sales Team and thinking about ways to cut expenses for the remainder of the year.