 QuickBooks Online 2023 Budget Reports Get ready to start moving on up with QuickBooks Online We're going to be using the free QuickBooks Online Test Drive Searching in our online search engine for QuickBooks Online Test Drive Selecting the option that has Intuit.com and the URL Intuit being the owner of QuickBooks Support Accounting Instruction by clicking the link below Giving you a free month membership to all of the content on our website Broken out by category, further broken out by course Each course then organized in a logical, reasonable fashion Making it much more easy to find what you need than can be done on a YouTube page We also include added resources such as Excel practice problems PDF files and more like QuickBooks backup files when applicable So once again click the link below for a free month membership to our website and all the content on it Pick in the United States version of the software and verify that we're not a robot When are you going to start calling me Rick? I'm not Barney anymore Barney I'm not a Barney I'm coming in a bit by holding down control up on the scroll wheel currently at the 1 to 5% on the zoom in Noting in the cog dropdown, we're not in the business view, but in the accounting view We'll try to toggle back and forth between the two views so you can see where stuff is under both of them Right-clicking on the tab up top to duplicate it like we do every time Right-clicking the duplicated tab to duplicate it again Back to the tab to the middle, reports on the left We're picking up the big balance sheet and then as that's taken tab to the right Reports on the left, this time the income statement, the P&L, the profit and loss We're going to close up the hamburger and the hamburger, the hamburggy It's otherwise cold and change the range from 010122 tab, 123122 tab Run it, refresh it, tab it to the middle, close in the boogie Rolling up, range change, 010122 tab, 123122 tab and run it. That's the setup process that we do every time. The balance sheet income statement be our being our major two financial statement reports. Now we're gonna be talking about budgeting reports, budgeting reports being different than most other reports because most other reports are gonna be constructed as we do the data input and generally give us more information about one or multiple line items on the balance sheet or the income statement. And it's important to note that when you're working in the accountant department or as a bookkeeper that budgeting kind of crosses over between a management type of activity and an accounting activity. We need both skills in order to do the budget because the budget preparation will of course be in the form of a financial statement which falls in the realm of accounting but we're trying to predict what's gonna happen into the future. So we need more information than just past data in order to determine what possibly might happen into the future if we want an actual good budget that has good predictive power to it. So that's kind of the first thing to understand. We've got to think about the fact that accounting itself represents past activities that are financial transactions. So our major goal as an accountant in other words as we've discussed in prior presentations is to set up a system so that we can make the financial transactions be as easy as possible in order to construct the proper financial statements, balance sheet and the income statement as well as to facilitate the financial transactions with our business partners, the people we're dealing with, customers, vendors and employees. The budget represents future data, a projection into the future. So we can base that budget on past data but we're gonna need added data to go into the future. Usually the baseline will be, here's what we did last year. Now what are we gonna do different in the future? For that we gotta think, are we gonna change your advertising? Are we gonna change the way our products are? Are we gonna adjust the prices that we're going to be charging? What do we think the impact is gonna be when we do so? Are there gonna be changes to the economy and that kind of stuff are gonna be necessary in order for us to populate then the budget? Now that said, as a bookkeeper you could basically generate a budget just based on past data if you wanted to do that as well but you just wanna be clear what you're putting together. So let's go to the tab to the right just to consider how this would be done. I'm gonna right click on the tab and duplicate the tab and then we're gonna go down to the reports on the left hand side and if I go into the reports, I don't think they have any budget reports at this time so if I was to search for a budget there's nothing there because they haven't set one up. So let's go through the process of just setting up the budget and then look at the reports that would be in place. Now note when setting up the budget it's not something that you're typically gonna wanna do just solely in QuickBooks usually. What you're gonna wanna do is export the data from QuickBooks possibly from the prior year I would say to Excel and then calculate your budget and make changes about what you think's gonna happen in the future and then I would go back in and import the budget that you have created back into QuickBooks. Why? Because QuickBooks has those reports especially the budget versus actual comparative type reports and that's what QuickBooks is gonna be quite useful for. So for example, we have our two forms up top a balance sheet and an income statement. Normally when we're first thinking about a budget we're thinking about the performance statement that's gonna be the income statement. So when I'm thinking about what's gonna happen into the future we're trying to think about performance oftentimes. It's kind of like if you were trying to see how far you can drive your car in a day you could say okay this is how far I drove my car in the prior period in this case the last year meaning the income accounts are going up over that timeframe and then you're gonna reset the odometer and say okay what's gonna happen next time if I set the odometer back to zero and I drive it for another day or another year how far am I going to get? Your first thought would be well you're gonna get about the same distance unless you change stuff. In this case you're gonna change stuff possibly like the budgeting possibly the economic environment is different and so on and so forth. So your starting point will typically be the prior year's profit and loss. So your starting point might be to export this profit and loss and we'll talk about this a lot more in a budgeting section or course in the future but just to get a general idea you might export say this profit and loss to Excel or you might break it out on a month by month basis and I can run it this way and then break out your information on a month by month basis to Excel to get a little bit more detailed or else you can just take the totals and basically divide them by 12 as kind of like your starting point and then adjust make your changes from there in Excel and then take that information from Excel and populate it back into the QuickBooks system so that QuickBooks can then run reports as actual time passes to compare what actually happened to what happened in the budget. Okay so that said let's go to the tab to the right. Now also note you could do a budget for the balance sheet as well but QuickBooks doesn't have as much capacity to do the budget for the balance sheet. The balance sheet would be where you're going to stand at the end of another year for example. So if this was where we stood as of this point in time, December 31st, 2022 and then we decided that we used this information to budget what we're going to do in 2023 then I can think about where my balance sheet would be where would we stand at the end of 2023 and we can also think about that on a monthly basis. To make those projections is a little bit more complex on the balance sheet side of things to actually fill out the balance sheet. There's multiple ways that you can think about doing that but we won't dive into that in detail. We're typically thinking about our performance statement, the income statement in here when we're doing our QuickBooks budgets. Okay so let's go back to the first tab. The way you enter a budget just to get some data in the system so we can generate a budget as you go to the cog up top and then we've got our budgeting which is right here. So we go to our budgeting and then it says add your first budget. So we're going to say all right, no budgets have been added. I'm going to add one up right here right now. This is going to be, I'll just call it budget number one. You could have multiple budgets if you want to be running multiple budgets and then we've got the fiscal year of January through December and so on. So we could do it for 2022, 2023. Let's run it for 2022 because I want to be able to do comparative data with it as well. So I'm going to populate that and then when I run the reports in other words I'd like to have some data that's in the system so I can run a report that will have a comparison between actual and the budget. And then the standard intervals are probably monthly but you could do it quarterly and yearly as well. And then you could try to pre-fill the data. So I could say take the actual data from 2022 and populate it. This might be useful if you were then to enter this data for 2023. This being your starting point. Now again, if you were a bookkeeper and you're saying, hey, I'm just going to make a generic budget based on the information I have, the past data, you could do this, right? You can say, okay, I'm just going to make a budget based on last year's stuff and then you've got your budget. But it's not entirely, it's not that helpful if you're not changing it for projections into the future because you could always run a comparative income statement if you're looking at actual data for the current period to the prior period. So you could already run a lot of reports that would compare like the current year to the prior year. So what you really want in the budget isn't just like the prior year data in it. What you would like is the prior year data that has then been altered for changes that you're making into the future, which means you need management involved and not just the accounting department. You might be both, you might be wearing both hats, but you need that added kind of component in it to make it a real budget that's going to give you a lot more information. And then you can break it down by subdividing it by customer, but I'm not going to subdivide it at this point in time. And so there's going to be our baseline information. You can see what we have on the left-hand side is just basically an income statement. So we've got our income statement. It populated the actual data from, I'm imagining it would have been the prior year, but I put the 2022 stuff in it as our starting point. And this would help us to generate our budget. So let's pretend we just are going to change this a bit. So I clicked on the create a budget down here and now we have the capacity to make adjustments to this data. So let's say like in here, I change it to a thousand or something. Now, I could, once I'm in there, I could like copy it across like that if I so choose. And then let's change this one, let's change this all the way across. I'll put this as like 300. And then I'll put my cursor on that and copy it across. And then let's just do a couple more of these. Let's make this like 500 and I'll copy this across. And then let's make this one like 200. And then I'll copy that across. There it goes. And then I'll go down here and just say a couple of these. Could I change a couple of these? Now it kind of saves that line. That's a little bit of annoying that it does the way it does that, but no big deal. We'll talk more about the data input later, 400. Let's copy that across. And just do maybe this one, I'm just gonna put, I'm just gonna put in here. Let's do this one. Let's put 200 and just copy that across. So now we've got at least something in the budget. Let's go ahead and save the budget and then look at the reports that would be generated from the budget. So I'm gonna close this back out. And then now I can go back into my reports so I can go into the hamburger on the left. We can go to the reports on the left hand side. I'm gonna close up the hamburger. And then in the overview, now we've got our budget overview, budget versus actual information as well on this side. So if I look at the budget overview, I'm gonna right click on it and open it in a new tab. And there we have, have our budget. So obviously the format of it looks a lot like an income statement breaking out by month. We have the range change up top. So we could be changing the range just for the last, you know, three months for the last quarter. So I could go from 10.01, 2.2 to 12.31, 2.2 and run it for example. Thusly, we don't have as many options down here for our comparative type reports as we do with like income statement reports that you can see here where we could break it out by month and quarter. And then we've got our options for the prior and that kind of stuff. But we can change, you know, obviously the range up top. Now, probably the more important report is to be able to compare the budget versus the actual. Cause remember, I would recommend oftentimes if you're gonna construct a budget that you would take the prior periods income statement looking something like this, export it to Excel and then modify it based on what you think's gonna happen into the future and then create your budget from that modified report. And it's like, well, why would I put it back into QuickBooks then when I just already have it in Excel at that point in time? Well, that's because you can run the budget versus actual report, which can give you useful data as time passes. So that's gonna be this one. I can right click the budget versus actual and open that one up and so there we have it closing up the hand boogie. And so now we've got this information by date and let's change the range up top. So cause we only have the last few months that have actual data in it. So let's change this from 110122 to 123122 and run it, run nine. And so now we've got the actual data for November and then the budgeted data. And then you've got the over budget information here. So if I pull out the trustee calculator, trustee calculator and we check this out, we're gonna say, okay, obviously the difference is this minus that is the 25 difference. And this amount here is the percent of the budget. So if I took the 975 divided by 1000, so we actually were at 97.5% of the budget. And so you got that for December and you've got that on the total on the right hand side. So this kind of comparative report is the added level of detail. Clearly you would only have the actual data as time passes because when you first make the budget, it's gonna be projection out into the future. Then time passes, we compare what actually happens to what we thought should happen. And then we're gonna obviously make our decision and change our decisions based on that. We're always trying to set a target so that we can shoot for the target and then make modifications to improve. So note, you have these two options up top as well. So you've got the dropdown. Notice it says the over budget. So if I took the actual and this was the budget. So now it's saying over budget and we were actually under budget. That's why it comes out to a negative. So if you want it, you could imagine it the other way. So you could say, okay, what if I wanted to put it, the remaining and then the percent of remaining. So now you've got the actual, the budget. And if I wanna see it in terms of the over budget, it would be negative 25 or I can see it in terms of the remaining, which would be the 25. And then you could take the, this line item is the percent of the remaining amount, which is gonna be the 25 divided by the budget of 1000. And that's gonna give us, if I move the decimal two places over that 2.5. So that's some of that's kind of a matter of preference in terms of whether you're probably not gonna choose both of those options. Maybe you're gonna choose these two down below. And so now you've got the actual, the budget and let's run it. And so now you've got the actual, the budget and the remaining and then the percent of the remaining versus these two up top. And then I uncheck those two. And that one is gonna give you the actual, the budget and then the over budget and then the percent of the budget. So that's probably kind of more of a matter of preference in terms of which way you kind of wanna see those budgeting options, but that's the general idea. The basic overview is that the budget, you wanna remember isn't something that you can expect like a client just saying, well now you just need to create a budget. That's not really what the bookkeeper would do what the accounting department does and enough of themselves because they only have the past data. They're gonna need the added information. If it's your own company file, you have that added information, which is your idea or knowledge about what changes you're gonna make. If you're not the owner of the business and you're doing bookkeeping or working in the company, then you gotta talk to other people such as the marketing department and management and whatnot and economists or whatever to think about what's gonna happen into the future. And then you can pool together the knowledge of the accounting department, which is gonna help you to just format the budget. And then people that are gonna make changes to try to improve performance so that you can make projections out into the future. When you do so, you probably wanna start off with the past data, export it to Excel, I would think make modifications on it, then import it back into the system so that you can run budget versus actual reports which help you to modify your behavior with regards to your business in the future. All right, let's go to the first tab and then just hit the dropdown on the cog. If we go to the business view, I don't think we've done anything unusual here. So the business view looks much the same. The cog is still up top. The cog is the cog. And then we've got the get things done page which is the homepage. It's kind of funny, because I don't think a lot of people get things done at home, but maybe we get stuff done at home. This is why I do stuff, man. Get stuff done. And then we got the reports which of course are in the business overview and then the reports.