QuickBooks Budgeting Tips

Using QuickBooks to create and monitor your annual budget is more straightforward than it appears. Because QuickBooks budgeting requires month-by-month entry for the annual budget, users often shy away from using the budget module. However, with a few simple changes, you can create a budget that works for your business, is easy to review, and is easy to change.

The Secret to a Painless Budget

The secret to a great budget is simplification. Do you really care about each detailed account when you review your organization's performance? Only if there is a question, and using the budget report can provide one-click details.

1. Review your chart of accounts, whether numeric or alpha. It's easier if you print a profit and loss statement and highlight the important results, such as total income, total cost of goods sold, total sales expense, and total general and administrative. The goal is to budget at a high level to make monitoring performance quicker.
2. For the accounts you marked as important, set up a parent account, such as payroll liabilities. The individual payroll liabilities, such as FICA, Federal, State, State Unemployment, Worker's Compensation, etc., will become subaccounts of this parent (this becomes clearer when viewing the chart of accounts in the hierarchical view).

 Reviewing Budget Reports in QuickBooks

QuickBooks supplies basic reports for reviewing budget performance. You can control how often you review and modify your budget by modifying the reports and saving them with a new name.

For example, using the basic QuickBooks budget report Profit & Loss Budget Performance run the report to the screen. Choose Modify Report from the menu bar. Several tabs will appear. On the Display tab, change the report range date to quarterly. To view the difference between actual and budget, on the Display tab choose show actuals and show dollar difference. To reduce the data in the report, select the advanced tab to show only rows and columns with budgets.

Entering the Budget in QuickBooks

The QuickBooks budget is set up for monthly entries. If your organization generates only annual budget amounts, take the annual budgeted amounts and divide them by twelve. Enter the monthly amount in the January field and choose "Carry this across."

To enter a budget based on quarters, individually divide each quarter by 3 and enter the correct amount for each month of the quarter.

Using QuickBooks budgeting helps businesses stay on track. You can easily see where you are compared to your budget and what you need to change. Using the budgeting module may seem like a lot of work, but it ultimately saves time and prevents surprises.