 QuickBooks desktop 2023 budget reports. Let's do it within two. It's QuickBooks desktop 2023 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 then 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 here we are in QuickBooks desktop sample rock castle construction practice file provided by QuickBooks going through the setup process we do every time maximizing the homepage to the gray area view drop down noting we got the hide icon bar open windows checked off open windows on the left hand side open going to the reports drop down company and financial open up the profit and the loss changing the range in 010124 to 123124 january to december 2024 customize it fonts and numbers change it 12 it okay it yes it okay it there we go reports drop down again company and financial this time the balance sheet report we're going to hit the drop down and go to the this fiscal year customize the report fonts and numbers we want to change the font to 12 okay yes okay that's what we do every time that's the setup process we got the major two reports balance sheet income statement or profit and loss remembering that every other report pretty much is going to give us more information more detail expand upon one or multiple line items of the major two financial reports that we have open here balance sheet in the income statement however this is an exception to the rule because now we're looking at the budgeting type of reports noting that when we think about the normal accounting process the if you're a CPA if you're an accountant if you're a bookkeeper you're working in an accounting department then your job typically is to take past data enter it into the system to create the end result of the financial statements balance sheet income statement and supporting reports when you're looking at a budget that's different because now you're projecting out into the future so we as accountants have some ideas on how to format the budget and we have past data on which we can start the budgeting process but we cannot create a budget into the future without or at least not one that takes into consideration management's thought process about the environment into the future but only past data because we need to know other things from the budget we need to know what happened in the past we also need to know what we think the current environment is going to be what's the economic environment what changes are we going to make from a managerial standpoint are we going to basically advertise differently are we going to be hiring more people are we going to be laying more people off why are we doing that what's the impact that we expect those to have on our financial data we in the accounting department if we're not the management of the company if we're bookkeepers for example then we don't have that kind of insight in and of ourselves so if someone asks us as a bookkeeper for example to do the budgeting they're like what about budgeting then that's the kind of thing you want to explain to them you can say well I could put together a budget based purely on past data but that's not usually the the grounds or the sole grounds on which a budget is created because usually we have to take past data and then whatever you think is going to happen into the future or whoever is management into the future so that we can then make accurate projections into the future and then we can make comparisons about what we actually do compared to those projections what we were hoping to be happening in the past so one more time if I go to the home page just to reiterate this these items were entering into the system bills pay bills invoices received payments these are all transactions that happened in the past that or as they're happening we are entering them into the system they have already happened when we enter them into the system or they are happening when we enter them into the system these then are used to create the financial statements balance sheet income statement supporting reports when we create the budget these forms are not used to create the budget because the budget is a projection out into the future when we create the budget we're typically going to take past data we're typically thinking about a profit and loss report because that's the performance report and then trying to predict based on that as well as other inputs what's going to happen into the future okay that said let's go to the reports drop down let's go to the the budgeting down here this is one way you can get there the main two budgets are the budget overview budget versus actual we can also get there by going to the report center up top maximizing it to the gray area going to the account and taxes there's that's not the one budgets that's the one we want here's our two main reports if you haven't entered a budget into the system you're not going to have anything in these reports because when you enter stuff in the system that's based on on that's the past data to create the current financial statements you have to enter the budget basically directly to enter the budget into the system it's not just made automatically in other words so if i run the budget they've already made one in this system if we had multiple budget which we can pick the budget we could make budgets for balance sheets and income statement we'll talk more about that shortly let's go ahead and say next next and okay here's the budget that has been provided for us by the practice file let's take it from 010124 to 123124 so by default they usually have it for a month by month budget so each month up top and then the total on the end we could change it by hitting the drop down and see it as we have seen with a profit and loss report we can see it by month we can see it by quarter if we so choose and we can see it by the total by basically the year so the budget if we imagine this system note that this is projecting what's happening into the future so if you were to build a budget you're probably going to take the prior year data let's imagine it was the end of 2023 you would run a profit and loss would often be your starting point as of 2023 in that case and then you would look at the performance for the prior year as your ground basis the starting point to project or think about what's going to happen into the future notice that the profit and loss is usually the the report we think of as opposed to the balance sheet first when we think of a budget because the profit and loss is the performance report it's the one that's showing you where you went from how far you went like we have the analogy of driving if you reset the odometer how far did you drive last year how high did the income accumulate up and the expenses accumulate up in the time frame of the last year the balance sheet then would show us if we ran a balance sheet for the beginning or the end of the prior year let's imagine 2023 if it was the end of 2023 that's where we stand as of that point the income statement primarily would be the driving or the performance over the time which would lead us to where we would end up at the end of 2024 so when we're thinking performance how far am I going on a month by month basis we're typically first thinking about a balance sheet now when we get into the budgeting section we'll talk more about how to create a budget a little bit more we've got full courses on creating budgets budgets are could be a whole course and in and of themselves above and beyond again just normal data input or accounting transactions usually geared towards entering prior data but we'll talk a little bit more about that process when we get to the budgeting section but just realize you're normally talking about a profit and loss when you're entering the budget so the way that you enter the budget is you're going to go to the company drop down you're going to go to the to the planning and budgeting set up a budget and if you didn't have a budget set up they would go through a screen to pick a budget would look something like this you can create multiple budgets so if I created a budget up top I choose the year I choose whether it be a profit and loss or balance sheet budget you could do either the profit and loss would be the default typically when you first create a budget and so there we have it I'm going to close this out because I'm not going to make a new one and go to the company drop down planning and budgeting set up budgets and then you're going to just basically so notice what we have here we have an income statement just listing out all the accounts on the left and then we've got a month by month breakout up at the top and you are in essence just going to enter all the data on a month by month basis into the system it'll sum it up for the year that's how you're going to enter the data how would you possibly know how much to enter per month you would typically create a profit and loss from the prior year as your baseline starting point and then and then possibly start by saying I'm going to take these numbers on a year a yearly basis and divide it by 12 and that could be your starting point to have an even number in each month or you might try to get more complex with that you might say let me run an income statement for the prior year and I'll run it by month because maybe I have a seasonal business or something like that and so I can then predict what happened or I can see what happened in the prior year on a month by month basis and maybe that's your starting point and then you'd have to adjust that with any other kind of adjustments that you had so oftentimes people would start by by say I'm going to make a profit and loss export it to excel take into consideration any other factors such as the economic environment changes in our management policy hiring and firing more people or whatever we're going to do and try to predict what that's going to have an impact on why we're doing it on the financial statements and then once you have that in excel you can then import it into into your budget you might ask well why in the world would I import it into quickbooks if I already have it in excel uh quickbooks then is good at running reports such as the budget versus actual so once you have a budget then you're going to want to look at the what actually happened versus what you budgeted to happen and see if you hit the target how close you were and then re-up the budget that's the planning process so uh given that then when we when we run the actual budget we can see it like this so this is the month by month kind of budget analysis we can see it on a on a on a I'm sorry this is the quarter by quarter we can see it month by month we can see it for the year and then we also might run a budget versus actual report so if I go back into the report center quite common report budget versus actual just going to choose the profit and loss that they have created in this practice file and we can change the range January through 1231 to four there it is so now we've got the the month the budget and then the the difference between the two and the percent budget let's first look at this on a quarter by quarter basis drop down let's make it quarter by quarter makes it a little bit smaller it's still much larger than the quarter by quarter when we just saw the budget because now we're going to have the comparison each of the four quarters so if I well let's look at it just for like the year first if I looked at it for the year now you've got this kind of comparative report so you've got each line item you can say okay well this is this is what we actually did 208 225.42 minus the 935 the budget so we've got a big difference and if I divide that out the percent here is working because it's not it's not really a change so it's not exactly like a horizontal analysis uh instead we're going to take the what actually happened 208 225.42 divided by the by the budget 935 00 and we've get if I move the decimal two places over 225.7 percent so so this is this one is is 2.77 times what was budgeted for so we can see that change that on a percentage of the budget basis as well and so that's going to be the the general outline of the budget and we can see this on a on a year basis we can see this on a quarter by quarter basis and we can compare what actually happened and then of course on a on a on a month I'm sorry for the first quarter compared to the budget and then the difference and the percentage change and obviously as time passes then we can see these changes and say why in the world were we so off on this particular line item and so on and we can update the budget going forward and the goal then being to try to predict what we think works it's going to happen try to make decisions try to guess what's going to happen in the environment into the future try to think about how many people we should be hiring and firing and what departments we should be focusing in on and so on we're going to make predictions on why that would be the case and then we're going to compare what actually happens determine whether or not we were correct or not if we're not correct then we make new estimates and we try to do better the next time going forward and that's the perpetual process that we'll see through the budgeting process but so just to recap the accountant as an accounting department as a bookkeeper accountant accounting department the budgeting process is not something that automatically falls entirely into our category of things to do because what our primary task is to create fight past transactions and enter them into into the system to create the financial statements and supporting reports but we do have the knowledge as accountants on how the budget will be formatted and we do have the past data as a key component to help us predict what's going to happen into the future so if we're going to be doing budgeting or included in the budgeting process then we're going to have to be working with management in some way as a bookkeeper or the accounting department or possibly it's our own business where we are the manager and then we're going to have to make those other productive decisions in terms of policy for the business what's the impact on the budget possibly starting with a prior year budget as the ground basis and then most likely do the budget like in excel making different scenarios and brainstorming and then enter that into the system so that so that quickbooks can do what it does well which is make the reports make comparative reports and so on within the quickbooks system