One of the ideal ways to be on top of your business finances is budgeting.
QuickBooks enables your business to prepare an annual budget to track and monitor your finances systematically.
QuickBooks is equipped with budgeting and forecasting tools that play a crucial role in planning and making quick plus significant business decisions. In QuickBooks, the budget is usually created using the accounting data of your business.
Note: When a budget is prepared, it is generally prepared for a fiscal year.
- 1 Why do you Need to Set up a Budget in QuickBooks?
- 2 How to Set up a Budget in QuickBooks?
Why do you Need to Set up a Budget in QuickBooks?
Before we dig deep into the steps to set up a budget in QuickBooks, it is imperative to know its business benefits.
By setting up budgets in QuickBooks, you can monitor, track, and analyze the expected income and expenses with the real income and expenses figures.
Also, once a budget is set up in QuickBooks, you can edit and review it as and when required. After that, you can use your financial reports to compare and analyze the difference in sales and expenses numbers with your budget.
How to Set up a Budget in QuickBooks?
Although determining a budget can be a time-consuming task, creating it in QuickBooks takes no more than six easy steps. Here are they:
Total Time: 35 minutes
Step 1: Select the Company
Go to your QuickBooks account, select the Company.
Step 2: Select Planning and Budgeting
Select Planning and Budgeting, and then choose Budget commands.
Step 3: Create a New Budget
The Create New Budget dialog box appears. It will be used to create a new budget.
Step 4: Enter the Fiscal Period
Enter the fiscal period you are budgeting for, in the text box given.
Step 5: Prepare Balance Sheet
Select whether to prepare a balance sheet or profit/loss budget.
Step 6: Mention Additional Profit and Loss Budget
In the extra Profit and Loss Criteria box, mention the criteria for additional profit and loss budget. Select Next.
Step 8: Prepare a New Budget with Existing Data
In the box that mentions, Create New Budget, select whether to prepare a new budget, or start with the existing data. Select Finish, after you are done.
QuickBooks enables users to prepare a budget for their profit and loss accounts. It also helps users to prepare a budget for balance sheet accounts as well. When a company maintains a budget, it enables it to analyze its financial performance.
Additionally, maintaining a budget also compels businesses to uphold a rigid fiscal control on any kind of spending by the company. By monitoring business spending, it becomes easy to cut down the expenses for the fiscal period, which results in boosting company profits.
The above steps to set up a budget in QuickBooks might seem a lot and you may find losing track. For such purposes, it is highly recommended to hire the services of a professional who is aware of the steps.