Budgeting with QuickBooks Online: Plan Your Way Forward

Posted 24 March by Blaine Bertsch in Accounting, Budget, Cash Flow, Entrepreneur, Small Business

Budgets are essentially the roadmap for every business and its future. If business, and even individual departments, don’t have clear budgets in place, the business goals will be clouded and the parameters you need to work within will be unclear.

With a clear budget and goals in place, team members can measure success and failure to the benchmark set at any given time, adjusting throughout the fiscal year as needed to ensure business goals are met or, better yet, exceeded.

Many see the task of creating a budget as a chore, but this task doesn’t have to be unpleasant, in fact, it can be simple and eye-opening. Just by going through the budgeting process, you can learn so much about your business and what you can do to achieve your goals.

QuickBooks Online for Budgeting

Not only is QuickBooks Online a great accounting platform, but it’s a solid budgeting tool as well.

Note, that QuickBooks Online Plus is required to access the budgeting feature.

Not only will QBO allow you to create a budget for your fiscal year, but it also allows you to create the budgets by Class, Location or Customer – and even start with historic data in your account.

When you’re creating your budget, you want to ensure that you’re using the correct dates. Double check that you have entered accurate information for your fiscal year as preparing your budget in QuickBooks Online correctly the first time will save you a whole lot of time in the future.

You can decide to start your budget using historical data or start a new budget from scratch.

How to Build a Budget from Scratch in QuickBooks Online

1. Click on the Cog icon at the top left to open up your toolbox

2. Click on ‘Budgeting’ under ‘Tools’

quickbooks online settings

3. In the ‘mini interview’ pop-up, select “No amounts, create budget from scratch”

QBO budget start from scratch

4. For a simple budget, select “Don’t Subdivide”

subdivide QBO budget

5. Select you fiscal year and name your budget

pick fiscal & name Quickbooks budget

6. Select ‘Finished’ and it will build your initial budget from your Chart of Accounts

Budget Built on Chart of Accounts

Now you can type in amounts for the different categories into the appropriate month. Once you have entered in all of your data, click ‘Finished’ and your budget will be saved.

To view the budget, go back into your Settings – Tools – Budgeting (the same path you took to create your budget) and your budget will be opened again for you to view and edit. You can also make additional budgets and toggle between them with the drop-down menu at the top of your budget.

For a full walkthrough of the budgeting process in QuickBooks Online, watch this video.

How to Improve Your QuickBooks Budget

So, now you have created your budget in QBO and are wondering how to improve upon it. Here are three tips to help you get started:

1. Look at your growth history

How have the last few years looked? Has there been a steady growth or do you have a good year followed by a bad year which is then followed by a great year? Is there any way you can determine why your company has grown the way it has in the past? Will past factors continue to make a difference in the present and future?

The adage of history repeating itself does apply to business and can be something you can learn from. Review your past growth so that you know the goals you set for the upcoming year are realistic and not completely out of reach.

The world is constantly changing and, unfortunately, no business is immune to feeling some of the effects of these changes. Because of this, it’s beneficial to keep up-to-date on what is happening in your industry, as well as the industries your company serves.

Many trade organizations will publish trade industry data that allows businesses to compare to each other. For example, the hospitality industry has sites like STRGlobal.com which allows hotels to join in and receive a standard report that details overall performance figures for other hotels (including their own, of course) in their market.

3. Ask your employees

It’s always prudent to ask your employees for feedback and ideas that will help you improve your business.

They may even be more aware of industry trends or upcoming expenses that you may not be aware of. It also help to get your team more engaged and will drive them to take ownership in keeping up with the budget if they are involved in the process from the beginning.

While you may have a better overall view of the company’s big picture, your employees can often provide better insights on the day-to-day issues that can greatly impact a budget. Working with your team will also help identify realistic goals for the company, around which you can build a budget within QuickBooks Online.

A budget versus an actual report can be generated in more account platforms. The fact that you have a plan to use a budget for comparison and measurement is a great advantage. You’ll truly be amazed by the insight and control that this information will provide you and your business, and how it allows you to make better decisions and adjust to changes as it occurs.

Limitations to the QuickBooks Online Budget

As you can see, the QuickBooks Online budgeting tool has some limitations.

First, it is built on your Chart of Accounts, which can lack the power and sophistication you may need in your budget. Building your own categories and tracking individual items can give you much more granular detail.

Second, the viewing and repeat options are limited as well. You can enter a cost monthly or split a cost across a quarter or even a year, which is quick and simple, but can be misleading at times. It is difficult to account for and track large payments that are periodic, and there is no access to repeat items in any other cadence, such as a bi-weekly payroll schedule.

You can view your budget by monthly increments, quarterly or yearly, which is adequate for long term, general budget planning, but may not be detailed enough for small business.

Third, although you can create multiple budgets, it is difficult to compare and test alternative options.

Finally, the budget vs. actuals report mentioned earlier, can be useful to see how you performed, but it is not built to forecast where you’re headed. In other words, how is your cash flow and sales forecast looking in comparison to your budget in the coming months?

Building a More Powerful Budget for Your Business

Here at Dryrun, we have some solid insight on building budget forecasts. Budgeting is one of the key functions that Dryrun offers, complete with a higher level of sophistication required my business to be proactive, agile and up-to-the-minute in their business.

Here’s what Dryrun offers as a QuickBooks Online Connected App:

1. Build your budget in your own categories, rather than via accounting codes, and track individual items so that you can see the level of detail that you require.

2. Take advantage of Dryrun’s numerous repeat options so that you can build a forecast that can repeat indefinitely and can be edited on the fly.

3. Track your recurring budget alongside your variable cash flow items, such as bills and invoices flow in and out of your business.

4. Dryrun can even import bills and invoices from QuickBooks Online. It keeps track of unpaid items, due dates, flags overdue items and even tracks partial payments recorded in your QBO account.

5. View forecasts in monthly, weekly or even daily view to keep track of near term cash flow as well as a longer view of your year.

6. Dryrun’s scenario-based approach makes it simple to build, or duplicate and edit different budgets, so that you can compare your options and make critical decisions.

7. Finally, Dryrun is built for forecasting so you can see into the future of your business. Predict your budget, cash flow and sales pipeline all in a single, highly visual forecast.


Find out how Dryrun can help you forecast your budget, cash flow and sales revenue in your business.

Learn More

Like the article? Please share...Share on LinkedInShare on FacebookTweet about this on TwitterShare on Google+Email this to someone