As you’ve no doubt noticed in business and in life, the activities that cost money almost always seem to outnumber those that bring money in. If you run your own business for a hobby, you may not need to plan ahead or use a budget. But most companies want to make money and most nonprofits want to do the most with the funds they have, so budgeting and planning are essential business activities.
Like any kind of plan, a budget is an estimate of what’s going to happen. You’ll never produce exactly the numbers you estimate in your budget. (If you do, someone’s playing games with your books.) But comparing your actual performance to your budget can tell you that it’s time to crack the whip on the sales team, rein in your spending, or both.
Budgeting in QuickBooks is both simple and simplistic. QuickBooks handles basic budgets and even provides some handy shortcuts for entering numbers quickly. On the other hand, you can’t see whether your budget is working as you build it, and playing what-if games with budgets requires some fancy footwork.
QuickBooks also lets you create forecasts of future performance, although forecasts look just like budgets and have all the same data entry tools—and the same limitations. The bottom line: if you gather budget numbers from dozens of divisions and perform statistical analysis on the results to build your final budget or you chafe at QuickBooks’ limited budgeting features, you’ll need a program other than QuickBooks (like ...