QuickBooks has the capability to create budgets. Budget numbers help the QuickBooks user compare actual sales and expense amounts to their budgeted totals. Reports comparing actual to budget numbers are on the Reports menu.
To create a budget in QuickBooks, navigate to Company->Planning & Budgeting->Set Up Budgets.
Once you have elected to set up a new budget, QuickBooks will ask for what year. Usually we are working on the next year. Since the sample file being used here has a current date of 2018, we will use the year 2019.
Budgets can be created to provide comparison numbers for balance sheets or profit and loss reports. While both are useful, profit and loss budgets are the more common. We will choose that option.
It’s possible to setup budgets for individual customer:jobs. If class tracking is turned on in your QuickBooks company file, you may create budgets by class as well. For the purpose of this example, we will not choose any additional criteria.
If budgets have been created in the past, it is possible to use numbers from the previous year. Then, those existing numbers can be edited to reflect changes expected in the coming year.
In this instance, let’s just create the budget from scratch.
The grid used for entering amounts into the budget looks much like a spreadsheet. There are no formulas though. Just enter the amounts in the appropriate spaces.
Each active account that would appear on a profit and loss report will show as a row. The columns of course are the months of the year.
The Copy Across button will allow us to place an amount for a certain account in the January column, then copy that same amount across all columns without actually having to key the data in.
The Adjust Row Amounts button will allow us to begin the year with a certain amount for a certain account, then either increase or decrease by a set percentage or dollar amount over the remainder of the year.
Once a budget is in place and actual transactions for the year are being recorded, you can access reports that will compare how your actual year is progressing in comparison to your budget.
On the Reports menu is a section labeled Budgets. In that section are several different reports that will compare the numbers and let you monitor your progress.
Hector Garcia, CPA
Certified Advanced QuickBooks ProAdvisor
12401 Orange Drive #136
Davie, FL 33330