Creating Budgets in QuickBooks Online

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Most clients want to know how they have performed over the year, while others eagerly want to make projections for the coming year. Budgets help by creating a spending plan to ensure you don’t run out of money. They help us realize our goals by creating priorities.  

QBO is a perfect environment to utilize real time data and make a relevant budget. Surprisingly, one of the biggest takeaways from creating a budget is peace of mind. 

Having a place to park ideas allows you to prioritize and be a realist about your goals. With a strong budget, you don’t have to feel guilty about splurging when the need arises.

Is such a Budget Possible?

Is it realistic to create this kind of budget in QBO? 

Yes, using QBO Plus you can create Budget versus Actual and Budget Overview Reports with your desired level of detail. With the redesigned reports, you can customize these reports as needed.

But to build a budget, you first must turn on Budgeting. To do this, go to Company Gear icon > Tools > Budgeting.

Making Your QBO Budget

While QuickBooks Online makes creating your budget easy, you must take time to think about the final outcome as you go through the process.

Making 'Budget' Sense

To start, keep it simple. Use the facts you’ve already recorded to create a budget. Later, you can build more complex customized budgets and reports. This means when you go through the mini interview to use budgets, use the Actual Amounts from last fiscal year.

What numbers do you want to use to create your budget?

What numbers do you want to use to create your Budget:

  1. Actual amounts from a previous fiscal year
  2. Create budget from scratch
  3. Copy from an existing budget

What about subdividing your budget?

My suggestion again – "keep it simple" at first. You can delete and create as many budgets as desired:

Select the budget year and give it a name.

Pick the appropriate fiscal year and enter the name that’ll help you identify one budget from another.

Customization Anyone?

After creating your Budget, you can edit each of your income and expense accounts to reflect your company goals.

  • Review each of the income and expense accounts rows
  • Edit to change or overwrite any figures
  • Save & Next to save each row you edit
  • Click Finished to save your Budget

Reporting your QBO Budget

Types of Budget Reports

There are two types of budget reports in QuickBooks Online, the Budget versus Actuals Report and the Budget Overview Report.

Budget vs. Actuals Report

This report shows a summary of budgeted amounts versus actual amounts and their variances and variance percentages. 

Finding the report is easy. Just start at the left-hand navigation bar and select:

Reports > All Reports > Business Overview > Budget vs. Actuals.

You can customize how you view the report by selecting Show Grid options of:

  • Accounts versus Months
  • Accounts versus Quarters
  • Accounts versus Totals

The result will be not only beautiful, but also informative and practical:

Budget Overview Report

This report is good for management planning for the upcoming year. You access this report by starting at the left hand navigation bar and selecting:

Reports > All Reports > Business Overview > Budget Overview.

Final Thoughts

The purpose of a budget is to keep us from going unexpectedly broke.

  • Budgets keep us focused and aligned with priorities/goals
  • Everyone needs boundaries no matter how large or small
  • Budgets allow us to stay in tune with performance

Remember, budgeting must to be turned on to use this feature, and there are no limits as to how many budgets can be created and stored in QuickBooks Online.

Finally, hard work should be rewarded. Splurges create excitement and validation for your accomplishments.

Just make sure those splurges are budgeted.