As we start to approach the New Year, I thought we might consider using budgets. Most business owners hear the word budget and immediately think it’s too much work! Well QuickBooks makes the work extremely easy with their great budget feature.
Per Wikipedia, “A budget is a quantitative expression of a plan for a defined period of time. It may include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. It expresses strategic plans of business units, organizations, activities or events in measurable terms.”
A budget is a plan for the year. I think by creating a budget business owners are forced to really examine where their money is going, and try to create a way to increase their profit. They can use the prior year’s numbers as a guide, then increase/decrease the numbers for the following year.
To find budgets in QuickBooks go to your toolbar, choose Company, select Planning & Budgeting, then Set up Budgets. You can choose to create a budget from the Profit & Loss accounts and/or the Balance sheet accounts. Just follow the prompts in QuickBooks to get the process started.
By setting up a budget in QuickBooks, you are able to process reports that show how close you are to your budget. This is a great tool and can help keep business owners on track with their spending. If business owners are taking a close look at where the money is going, then they can see where they might be able to save some money and become more profitable.