A budget is one of the most important keys to business success. However, only about half of small businesses create a documented budget, according to a 2021 Clutch survey.
As Dave Ramsey says, “A budget is telling your money where to go instead of wondering where it went.”
Creating a budget can help you understand your business operations, notice trends, and visualize exactly where you are spending and making money. It also can help you to catch bad spending habits, prepare an emergency fund, and ultimately maximize your business potential. Knowing more about the revenue and expenses your business will incur will help you to make better informed financial decisions. You will have more clarity about where to allocate funds, where you can minimize spending, and how to make your business as profitable and efficient as it can be.
Using QuickBooks to Prepare a Budget
QuickBooks makes it quick and easy to setup a budget, since it can be efficiently tailored to your business. QuickBooks budgets are easily customizable and can be edited at any time. It also gives you the option of automatically creating a budget directly from your last year’s data or your current year’s data, so you don’t have to enter everything manually.
Many businesses expect revenue changes during the year due to natural differences in industry demand. To accommodate this, QuickBooks provides the option to create monthly, quarterly, or yearly budgets, so you can easily plan ahead for seasonal income and expense fluctuations.
QuickBooks also allows you to setup multiple budgets at once. You may prefer to see smaller, more detail focused budgets rather than a larger, general overview. You can categorize by project, job, class, accounts, and more.
Once you have a budget created, you can pull a variety of financial comparison reports during the year to see if you are on track financially or if you need to make changes. You may wish to view a Profit & Loss Statement or a Budget vs. Actual Report.
In the following short video you will learn how to setup a budget in both QuickBooks Online and QuickBooks Desktop.
Lead your business on a successful path and create a QuickBooks budget today. If you have any questions or would like some professional assistance, don’t hesitate to contact us. Our goal is to help your business succeed!