How QuickBooks Budgeting & Forecasting Reports Helps To Track Company Growth

Looking for QuickBooks budgeting & forecasting reports helps to track company growth? Don’t worry, here we are with an article to aid you; read the complete article to know the QB budgeting. Go through the article to learn the concept of budgeting, the concept of forecasting, how to use them as tools, examples, and many more. Stay with us and keep learning, if you encounter an issue contact our QuickBooks ProAdvisor toll-free:+1-844-405-0904

Budgeting and forecasting are the most significant financial tasks for any size of business. Budgets and forecasts are usually connected together as they should be, but basically, they are not the same.

With the help of these reports, you can identify cost savings opportunities. You will also know the possibilities for expanding revenue sources. Errors or excluded for incorrect accounting entries can be identified with these reports.

Keep reading this blog to learn in detail about a list of QuickBooks Budgeting and Forecasting Reports. But before proceeding further you need to know what is Budgeting and Forecasting?, Let’s discuss.

Concept of Budgeting

A budget is a comprehensive financial framework for what the business estimates will be a period of time financially (often a year). The budget will cover features about the company’s earnings, payments, cash flow, and financial condition. This data must be accessible from your company’s financial statements.

It depends on the area of the company, There might be a budgeting method – usually accomplished later in the year, with the input from the company’s different operative branches and profit centers that should be handled by your head of finance.

In small businesses, budgeting can be done with the help of the owner individual, or some key employees. The method and time frame for finishing this method is expected to be shorter in these cases.

Most budgets are fixed and established for the company’s financial year. However, some businesses use a constant budget, which is adjusted during the year based on changing business circumstances. While this can figure efficiency, it also needs close attention and does not necessarily generate better results.

Concept of Forecasting

A forecast is a higher-level prediction of what will happen next, usually on major revenue items and overall expenditure. Forecasting can be accomplished across the long-term and short-term time limits. It can be executed from top-down or bottom-up.

A long-term forecast can appear over many years and support a long-term imperative business strategy. Short-term forecasts are typically made for operational reasons. Revenue forecasting will make adjustments in headcount, production planning, and inventory levels for businesses that create or distribute a physical product. A solid forecast can also help determine the terms of bank lending.

Service and consulting businesses will typically use these forecasts to manage staffing levels.

How to Use Budgeting as a Tool

Basically, the budget can be used as a management tool to run a business. Exact or real financial decisions are correlated to budgetary amounts, and variations are examined. If spending in a particular area exceeds the budget, a company should resolve whether the overage is associated with the additional business or just overspeeding.

In some companies, the budget is applied as a factor in achieving a performance-based bonus. Here are some things to consider to make your budget a useful tool in managing your business:

  • Begin with a genuine cash-flow prediction. Your revenue forecasts will run in this part, but they may not materialize completely. It will be better to be conservative here.
  • Distinguish between necessary expenses including electricity and the internet and your discretional expenses which are not necessary to run the company. These will differ from business to business.
  • If there is a shortfall in your budget, reduce debt.
  • Try to include cash savings in your budget so that any additional profit can serve as a buffer against future decline in business.

How to Use Forecasting as a Tool

Forecasting is an essential mechanism that supports a company to make the essential modifications to spend and focus on the year when a business changes. For example, if a major customer is reducing or adding the volume of business with your company, it will have a major influence on processes and cash flow.

Here are some things to consider for forecasting a useful tool in managing your business

  • Examine it by handling more than one forecast, maybe three: one that displays an optimistic view, one deterministic, and one common likely. This enables you to plan for development, but at the same time adjust some opportunities that slow down or slow down compared to what was originally thought.
  • Update your forecast regularly. Conditions change, so they cannot be taken off-guard.
  • Include essential members of your team, like managers of sales and operations. They are usually observing what is falling or arising. This will give more useful information and hold these key managers included in the process.

QuickBooks Budgeting vs Forecasting Reports 

QuickBooks Budget

A budget is a complete financial outline of what the company thinks will happen over a period of time (often a year) financially. The budget will include details about the company’s revenues like expenses, cash flow, and financial position. This information should be available from your business financial reports. It gives you information about your company’s budget revenues as well as expenses.

  • Budget Overview: It gives you information about your budgeted revenues and expenses.
  • Budgets vs. Actual: Forecasts Report helps you to compare your company’s actual profit and costs to your company’s budgeted amounts. In addition to this also provide your deviation so you may know whether you are over or under budget.
  • Profit and Loss Budget Performance: It customizes report of profit and loss is similar to the budget vs. Actual Report. Except for the actual revenues, expenses are compared to the budget amounts for the current month and current year.

In smaller companies, the owner alone or with the help of a few key employees handles their budget. The process and time frame to complete the process are likely shorter in these cases.

Most budgets are static and set for the company’s fiscal year. Still, some organizations use a constant budget, adept at the time of the year based on changing business conditions. Although this can add efficiency, it also needs close concentration and may not necessarily yield a better outcome.

Budgets as a Tool

Ideally, a budget is used as a management tool to run the business. Actual financial results are compared to budgeted amounts, and variances are analyzed.

  • Start with a realistic cash-flow projection. Your revenue forecasts will drive this in part, but they may not fully materialize. It is better to be conservative here.
  • Differentiate between essential expenses like electricity and the internet and your discretionary expenses that are not essential to running the company. These will vary from business to business.
  • Build debt reduction, if you have any, into your budget.
  • Try to incorporate cash reserves into your budget so any extra profits can serve as a cushion against a future downturn in business.

QuickBooks Forecasting

A forecast is an idea of what will happen at a higher level, generally key revenue items and overall expenses. Forecasts can be done over the long term and short term based on time horizons. These can be done from top-down or bottom-up.

Forecasts as a Tool

Here are a few things to consider when doing forecasts for your company:

  • Consider using more than one forecast, perhaps three: one that reflects an optimistic outlook, one pessimistic and one most likely. This allows you to plan for growth but also to adjust in case some opportunities don’t materialize or happen slower than originally thought.
  • Update your forecast on a regular basis. 
  • Involve key members of your team, such as managers from sales and operations. They are often closest to what is really happening. This will provide better information and keep these key managers involved in the process.

QuickBooks Forecasting provides you with reports. That assists you with the business’s projections of future revenues and expenses.

  • Forecasting Overview: Here you have to select the time period. It will provide the company’s monthly forecasted income and cost for the selected time.
  • Forecast vs. Actual: It is the Report gives you the budget-to-actual ventures and expenses. Otherwise, account balances are compared to the forecasted or projected amounts.

More QuickBooks Reports

It is accounting software for small and medium-sized businesses. QuickBooks has a comprehensive suite of accounting and financial reports to meet your reporting needs. There are various types of reporting such as:

  • Company and Financial Reports: It tells you how your company is doing financially.
  • Customer and Receivable Reports: It tells you how much your buyer owes you.
  • Sales Reports: It gives you information about sales reps, sales orders, and pending sales.
  • Jobs, Time & Mileage Reports: It tells you about your job estimates, including time, the amount spent, and mileage for each job.
  • Vendor & Payable Reports: It shows you how much money your company owes to its vendors.
  • Purchase Reports and Inventory Reports: It gives you information about your company’s purchases and its open purchase orders, including inventory value, stock, and work-in-progress.
  • Employees & Payroll Reports: It shows you information about your employees and payroll expenses.
  • Banking Reports: This is another report that gives you information about your banking transactions.
  • Accountant & Taxes Reports: It gives you information about your basic accounting reports. It also provides the information needed to prepare your income tax return and needs to do payroll tax.
  • Lists Reports: In conclusion, this report shows your phone, contact, and customer lists that you will find useful.

In QuickBooks, these reports can be customized to build your own reports. Most probably small business owners will never feel the requirement to customize the reports. As there are enough pre-built reports in Quickbooks to match their accounting and financial reporting needs.

How to Export Your Financial Forecast Reports

Finally, after setting up the Forecasting in your QB desktop. You are now ready to export these reports in Excel. Excel can add further scenarios and combine the other months that cross over different years. Therefore it will help you further to analyze your business growth.

How to create a Budget or forecast In QuickBooks Desktop

Budgeting and forecasting tools in Desktop help in making a decision and planning accordingly to grow your business. But before budgeting and forecasting, you need to follow some steps to set the fiscal year correctly.

  • First, you need to go to the company menu where you can see My Company, click on it.
  • Then you need to click on the pencil icon or you can say the edit icon.
  • After that select Report information.
  • Ensure that your Fiscal year’s first month is correct.

After doing the above-mentioned steps you need to check the financial report of the last fiscal year.

  • Open the report menu first.
  • Then move your cursor on Company and Financial.
  • From here, depending on your forecast or budget, you have to choose the Profit and Loss detail or Balance Sheet Detail.
  • Now go to the Dates Dropdown, you have to choose Last Fiscal Year.
  • Click on Refresh.

Create a Budget for QuickBooks Desktop

  • Firstly go to the company menu.
  • Move your cursor to Planning and Budgeting.
  • Next, choose Set up Budgets.
  • Choose Create New Budget.
  • Now you have to set the fiscal year.
  • After that, select Profit and Loss or Balance Sheet. If you choose profit and loss then you have to fill in the additional information like jobs or class tracking.
  • Next, tap on the Next button.
  • Now choose either “Create a budget from scratch” or “Create budget from the previous year’s actual data” after selecting Profit and Loss.
  • The final step is to click on Finish.

Create Forecast for Quickbooks Desktop

  • For forecasting go to the Company menu again.
  • Then navigate your cursor on Planning and Budgeting.
  • Next, choose Set up Forecast.
  • Then you have to choose Create New Forecast.
  • From here you need to set the Fiscal year and you have the option to give additional details like jobs or class tracking.
  • Now you have to choose either “Create a forecast from scratch” or “Create a forecast from the previous year’s actual data”.
  • Then finally click on Finish.

Hope, after reading this article you got a clear idea of QuickBooks budgeting and forecasting, how it works, and all related things.

But if you still have any issue regarding this topic or any accounting and bookkeeping-related query then feel free to reach us on our toll-free +1-844-405-0904 and directly get in touch with our Intuit Certified ProAdvisor and get instant help for your query.

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