QuickBooks Tip: Create a Budget for Your Business

If you’re running a business, you know about the importance of creating a budget and sticking to it throughout the year. Defined as a quantified, planned course of financial action over a period of time, a budget attempts to estimate inputs and outputs to make financial planning and reporting easier for your company. QuickBooks allows you to create and track your company’s budget in a few simple steps.

Create a budget in QuickBooks

You can create budgets for either Profit and Loss accounts or Balance Sheet accounts by fiscal year.

Follow these steps to create a budget in QuickBooks:

1. Go to the “Company” menu, choose “Planning & Budgeting,” and then click “Set Up Budgets”
2. Select “Create New Budget”
3. Choose the fiscal year for the new budget, and choose “Profit and Loss” (income and expense) or “Balance Sheet” accounts
   1. If you choose “Profit and Loss,” you can specify additional criteria of “Customer” (Job or Class), if class tracking has been turned on
4. Choose whether you want to create the budget from scratch or from the previous year’s actual data
   1. To create the budget from scratch, manually enter amounts for each account that you want to track
   2. If you want to create the budget from the previous year’s actual data, QuickBooks will automatically enter the monthly totals from last year for each account in the budget – you can then modify this information to adjust for the current year’s budgeted information.
5. Click “Finish” to create the new budget

Translate your budget into actionable business objectives

The purpose of creating a working budget for your business is to provide a base against which actual performance can be measured. In order to make it worthwhile, you need to  take action as a result. QuickBooks allows you to easily track your progress, measure performance and compare your budget to your actual output, making it easier to stay informed about the effect of past, present and future actions your company can take.  Printing the monthly profit and loss compared to budget is a quick way to track this performance.

If you need assistance with creating a budget in QuickBooks or have specific questions about translating your budget into actionable objectives, contact me or another member of Kaufman Rossin’s QuickBooks ProAdvisors team.