Start with categories
Categories are how spending is grouped in reports: Rent, Salaries, Advertising, Software. Open Budgets and add the ones your business uses. Keep the list short; ten good categories beat fifty vague ones.
If you work with an accountant, give each category its account code and tax code from their chart of accounts. The journal export uses them, so your accountant can import the month without retyping anything.
Add a monthly budget
Give a category a monthly budget, for example Advertising at 3,000. The month follows your business timezone, and every month starts fresh.
When spending in a category reaches 80% and again at 100% of its budget, owners and admins are notified and emailed, and the budget.threshold webhook fires.
Warn, or refuse
By default a budget only warns. Turn on Refuse expenses that would go over the budget to make it a hard limit: an expense or hold that would take the category over is refused with BUDGET_EXCEEDED, from the dashboard and from your software alike.
Close the loopholes
A budget is easy to dodge by typing a slightly different category name. Turn on Every expense must use one of these categories, and spending with no category or an unknown one is refused with CATEGORY_REQUIRED.
Payees help here too. Save the people and companies you pay often, each with their usual category, and picking a payee fills in the category for you.
See budgets against actual spending