A well-created budget is like a good map to guide your business to achieve its future goals. Creating a budget in Quickbooks is easy with its excellent Budgeting feature and reports. Read more at Quickbooks Online review.
The best reason to create a budget in your Quickbooks, either desktop or Online, is to plan your fiscal year spending and manage your cash flow needs by continual monitoring variances between your set budget forecast and actual transactions.
Keep a close eye on these budget reports will allow you to adjust your cash flow needs with additional short-term financing or reallocation of resources.
What is a business budget?
The budgeting feature is one that allows you to plan your companies anticipated income and expenses and then compare those figures to your actual spending. Once you create your budget, Quickbooks automatically completes all the actual amounts from your daily transactions and compares them with your projections.
Why a budget is important to your small business
The primary function of a budget is to plan your spending and then secondarily, by monitoring variances in forecasts versus actual, to ensure that you will always have enough cash flow to continue your business operations. You budget report will alert you to shortfalls in cash that require obtaining working capital loans.
How to Create a Budget in Quickbooks Online
In order to have the ability to create budgets in your Quickbooks Online account, you will need to upgrade to Quickbooks Online Plus. This level of account lets you create profit and loss budgets for each fiscal year with both expenses and income accounts.
Profit and loss budgets are summaries of expected corporate income and expenses. Prepared annually, or for shorter periods, quarterly or monthly. This report is different than a profit and loss statement which documents past performance, whereas this publication is a future forecast of profits and losses for a specific time period.
Budget Setup Steps
1 – Fiscal Year setup. Check to be certain that your fiscal year data is set correctly because this will impact your budget. Click on the gear button then Accounts and Settings > Advanced > Accounting.
2- Create a Budget. Start by clicking the gear button then Tools > Budgeting > Add Budget
3- Edit Budget – In New Budget window add a title for your budget and use the Fiscal Year drop down to select the year. The Interval button is to select time sections.
4- Customize Budget – There is a Subdivided option which you can use to divide your budget by criteria such as customers, classes, and locations. If you decide not to use this feature, click Don’t Subdivide.
5- Complete Budget – Now is the time to enter your expenses each month. If you want to repeat the information in all columns, an example would be the rent which is the same monthly, then after you add the first entry click the Copy Across button and all the other columns will auto-fill.
Quickbook Budget Tutorials
How to Create a Budget in Quickbooks 2018
How to Create a Budget in Quickbooks 2017
How to Use Your Quickbooks Budget
The real value of setting up your budget in your Quickbooks accounting system is the monitoring of your actual spending and sales versus your projected estimates.
On a regular basis, monthly at the minimum, review your budget and read the two reports available (both for viewing onscreen and to print or download):
- Budget Overview Report – This report shows a summary of your forecast budgeted amounts for each specific item.
- Budgets vs Actual Report – This report shows an overview of budgeted figures versus actual transactions and any variances in both dollars and percentages. See the screenshot below.
Further detail on step-by-step budget creation in Quickbooks
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