Tips for QuickBooks Users

Creating a More Effective Budget in QuickBooks Online

Creating a More Effective Budget in QuickBooks Online

Drafting a budget can be challenging. It’s not easy to estimate future income, expenses and other factors that may change over time. Even so, a well-prepared budget remains one of the most valuable tools setting financial goals, allocating resources effectively, and measuring progress throughout the year.

QuickBooks Online aims to make budgeting easier with built-in tools that can help you create, manage and update budgets as your business evolves. By automating many routine steps, it reduces the need for manual spreadsheets. This gives you more time to focus on planning, analysis and your overall financial strategy.

Using the Budget Framework

To get to QuickBooks Online’s budgeting tools, hover your mouse over Reports in the toolbar on the left, then click Financial Planning | Budgets. Click Create budget in the upper-right corner. For Budget type, click the button in front of Profit and loss. This is the simplest and most commonly used option. You’ll plan your budget around anticipated income and expenses over a specific period.

Select the Period you want by clicking the down arrow next to that field. For Budget format, select Consolidated. This means your budget will address income and expenses for your business as a whole rather than creating individual budgets based on location, class, department or customer.

If you’ve been using QuickBooks for a while, it will already hold your actual income and expense data. You can opt to Pre-fill data from a past period to use as a model. If you decide to do this, select the period you want from the drop-down list. You can also create Custom budgets or Import budgets.

To create a budget from scratch, click Custom budgets. When you’re finished here, click Next.

The page that opens next might look familiar if you’ve previously worked with a budget. Each row displays an account from your business’s Chart of Accounts. Columns contain individual time blocks. The default is Monthly, but you can change this to Yearly or Quarterly (upper right of the page). You can also change the budget name by clicking the pencil icon in the upper-left corner.

There are two ways to enter numbers if your monthly number is going to remain the same all year: 1) You can enter an annual total for the line item in the Budget totals column and let QuickBooks Online divide it evenly into monthly totals, or, 2) you can enter it in the first column and click the icon to repeat it for the other months in that row. If an amount will vary from month to month, you can manually enter the appropriate number in each column for the budget line item.

Make sure that Autosave is on, so you don’t lose any work. Click the gear icon in the upper-right corner and make sure Autosave budget is checked. But always Save manually when you’ve finished a work session (lower-right corner).

10 Budget Tips

Developing a budget takes time, and it’s common to make adjustments as new information becomes available. The goal is to create a realistic plan based on the best financial information and business insights you have today.

As you build or refine your budget, consider these 10 tips to help make it a practical and effective tool for managing your business finances.

1. Take a conservative approach. To help minimize the need for significant reallocations, use reasonable and conservative income estimates and ensure your budget includes adequate funding for expected expenses and essential purchases.
2. Consider your sales cycle. If your revenue and expenses fluctuate throughout the year — such as in a seasonal business — adjust your budget to reflect those patterns rather than allocating the same amounts to every period.
3. Don’t overcomplicate your budget. Rather than tracking every minor office supply or small purchase separately, consider grouping related expenses into broader categories. This approach can simplify budgeting, improve reporting, and make your financial data easier to analyze and manage.
4. Plan for unexpected expenses. Including a cushion in your budget can help your business manage unanticipated costs without disrupting operations. Consider building this flexibility into an appropriate expense category as part of your overall budgeting strategy.
5. Prioritize essential expenses. When developing your budget, focus first on the costs required to operate and support your business. Once core needs have been addressed, you can evaluate additional expenditures and opportunities based on available resources.
6. Work on your debt with extra dollars. If your projected income exceeds your expenses, consider using those funds to pay down outstanding debt. Debt costs money.
7. Get input from employees. If you have people working for you, bring them into the process, especially if they have more knowledge than you in specific areas.
8. Learn from QuickBooks Online’s budget reports. QuickBooks Online offers reports specifically designed to address budget issues: Budget Overview and Budget vs. Actuals. Review them at least once a month.
9. Look for opportunities to improve cost efficiency. If certain expenses are higher than expected, consider evaluating alternative vendors or solutions that offer comparable quality and value at a lower cost.
10. Measure your progress. Ongoing monitoring and adjustments can help keep your financial plans aligned with business goals while providing valuable insights for future budgeting.

Keep Your Business on Track

While budgeting isn’t required, it can provide valuable insight into your business’s financial position and support more informed decisions. If you need assistance creating or managing budgets in QuickBooks Online or would like guidance on any of its budgeting features, contact the office.

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