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QuickBooks Budgeting Guide for Small Businesses & Contractors

How to Create and Manage Budgets in QuickBooks: A Guide for Small Business Owners and Contractors

As a small business owner or contractor, managing your finances is crucial for success. QuickBooks is a powerful tool that can help you create and manage budgets effectively. In this guide, we’ll walk you through the process of setting up and maintaining budgets in QuickBooks, ensuring you stay on top of your financial game.

Why Budgeting Matters for Your Business

Before we dive into the how-to, let’s quickly review why budgeting is essential:

  • Helps you plan for future expenses
  • Allows you to track your financial progress
  • Identifies areas where you can cut costs
  • Assists in making informed financial decisions
  • Provides a roadmap for achieving your business goals

Getting Started with QuickBooks Budgets

To begin creating budgets in QuickBooks, follow these steps:

1. Access the Budget Feature

First, navigate to the budget feature in QuickBooks:

  1. Click on “Company” in the top menu
  2. Select “Planning & Budgeting”
  3. Choose “Set Up Budgets”

2. Create a New Budget

Now that you’re in the budget setup area, it’s time to create your first budget:

  1. Click “Create New Budget”
  2. Select the fiscal year for your budget
  3. Choose whether to create the budget from scratch or base it on last year’s data
  4. Select your preferred budget type (Profit and Loss or Balance Sheet)
  5. Click “Next” to proceed

3. Choose Additional Options

QuickBooks offers additional options to customize your budget:

  • Subdivide by customer, class, or job
  • Enter budget data manually or copy from the previous year

Select the options that best suit your business needs and click “Finish” to create your budget.

Entering Budget Data

With your budget framework in place, it’s time to input your financial data:

1. Manual Data Entry

If you’ve chosen to enter data manually:

  1. Click on each cell in the budget grid
  2. Enter the appropriate amount for each category and month
  3. Use the tab key to move between cells quickly

2. Copying from Previous Year

If you’re basing your budget on last year’s data:

  1. Review the pre-filled amounts
  2. Adjust figures as needed to reflect your current goals and expectations

3. Using Budget Tools

QuickBooks offers helpful tools to streamline the budgeting process:

  • Copy Across: Copies a value across all months
  • Adjust Row Amounts: Increases or decreases all amounts in a row by a percentage

Managing Your Budget

Creating a budget is just the first step. To make the most of your QuickBooks budget, follow these best practices:

1. Regularly Review and Update

Set aside time each month to review your budget:

  • Compare actual figures to budgeted amounts
  • Identify any significant discrepancies
  • Adjust your budget as needed to reflect changing circumstances

2. Use Budget Reports

QuickBooks offers various budget reports to help you analyze your financial performance:

  • Budget vs. Actual: Compares budgeted amounts to actual income and expenses
  • Budget Overview: Provides a summary of your entire budget
  • Profit & Loss Budget Performance: Shows how well you’re sticking to your budget

To access these reports, go to “Reports” > “Budgets & Forecasts” and select the desired report.

3. Make Informed Decisions

Use your budget data to guide your business decisions:

  • Identify areas where you’re overspending
  • Look for opportunities to increase revenue
  • Plan for upcoming expenses or investments

Tips for Effective Budgeting in QuickBooks

To make the most of your QuickBooks budgeting efforts, consider these tips:

1. Be Realistic

While it’s good to have ambitious goals, make sure your budget is based on realistic expectations. Use historical data and industry trends to inform your projections.

2. Include Multiple Scenarios

Create multiple budgets to account for different scenarios, such as best-case, worst-case, and most likely outcomes. This will help you prepare for various situations.

3. Involve Your Team

If you have employees or partners, involve them in the budgeting process. They may have valuable insights into department-specific expenses or revenue opportunities.

4. Use Classes and Jobs

Take advantage of QuickBooks’ class and job tracking features to create more detailed budgets for specific projects or departments.

5. Don’t Set It and Forget It

Your budget should be a living document. Regularly review and adjust it to ensure it remains relevant and useful for your business.

Conclusion

Creating and managing budgets in QuickBooks is a powerful way to take control of your small business or contracting company’s finances. By following the steps outlined in this guide and implementing best practices, you’ll be well on your way to making informed financial decisions and achieving your business goals.

Remember, budgeting is an ongoing process. Stay committed to regularly reviewing and updating your budget, and you’ll reap the rewards of better financial management and increased business success.



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About Fortified Bookkeeping

I am an experienced leading provider of Bookkeeping services dedicated to helping businesses of all sizes manage their financial responsibilities and maximize their potential. I offer comprehensive solutions tailored to each client’s unique needs. 

Contact me today to learn more about how we can support your business and help with your business taxes.

  • Braden Hallman ( Owner / Bookkeeping Professional )

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