QuickBooks 2012: The Missing Manual

Chapter 20. Budgeting and Planning

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 a small business, you may not need to 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. The program 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, you’ll need a program other than QuickBooks (like Excel) to massage the numbers. Then import your budgetary masterpiece into QuickBooks ...