1. Budgeting, Forecasting and Business Planning Chapter 8

2. PAGE REF #CHAPTER 8: Budgeting/Forecasting SLIDE # 2 Objectives Create Budgets Create Budget Reports by Customer/job or by Class Create Forecasts and Forecast Reports Utilize the Cash Flow Projector Develop a Business Plan for your business 1

3. PAGE REF #CHAPTER 8: Budgeting/Forecasting SLIDE # 3 Creating Budgets QuickBooks allows you to create a budget for each account on your chart of accounts To create a budget: –Select the Company menu, then select Planning & Budgeting, and then select Set Up Budgets –Select Profit and Loss or Balance Sheet accounts –A budget can be created from scratch or from previous year’s actual monthly totals 1

4. PAGE REF #CHAPTER 8: Budgeting/Forecasting SLIDE # 4 Creating Budgets for Jobs You can set up a separate budget for each customer or job which On the Set Up Budgets window, click Create New Budget: –Select Profit and Loss Budget type –Select Customer:Job on the Additional Profit and Loss Budget Criteria window –Enter budget amounts 4

5. PAGE REF #CHAPTER 8: Budgeting/Forecasting SLIDE # 5 Creating Budgets for Classes If you use class tracking in QuickBooks, you can set up a separate budget for each class on your Class list On the Set Up Budgets window, click Create New Budget: –Select Profit and Loss Budget type –Select Class on the Additional Profit and Loss Budget Criteria window –Select Class on the Current Class drop-down list –Enter budget amounts 7

6. PAGE REF #CHAPTER 8: Budgeting/Forecasting SLIDE # 6 Budget Overview Use the Budget Overview reports to review your budget information and make adjustments to budgeted amounts as necessary Select the Reports menu, then select Budgets & Forecasts, and then select Budget Overview Select the budget to use Select Account by Customer:Job from the drop-down list Click Finish to create the report QuickBooks enters This Fiscal Year-to-Date as the default dates for the report 9

7. PAGE REF #CHAPTER 8: Budgeting/Forecasting SLIDE # 7 Profit & Loss Budget vs. Actual by Account Budget vs. Actual reports in QuickBooks allow you to measure the profitability of your company based on the budgeted amounts you set at the beginning of the year Select the Reports menu, then select Budgets & Forecasts, and then select Budget vs. Actual Select the budget to be used in the report Select Account by Month report layout Click Modify Report and then click Advanced Click the box next to Show only rows and columns with budgets and then click OK QuickBooks displays the modified report showing only customers and jobs for which you entered a budget 11

8. PAGE REF #CHAPTER 8: Budgeting/Forecasting SLIDE # 8 Profit & Loss Budget vs. Actual by Job QuickBooks displays the Profit & Loss Budget vs. Actual report with a column for each Customer and Job Select the Reports menu, then select Budgets & Forecasts, and then select Budget vs. Actual Select the budget to be used in the report Select the report layout Account by Customer:Job Click Modify Report and then click Advanced Click the box next to Show only rows and columns with budgets and then click OK QuickBooks displays the modified report showing only customers and jobs for which you entered a budget 13

9. PAGE REF #CHAPTER 8: Budgeting/Forecasting SLIDE # 9 Profit and Loss Budget vs. Actual by Class QuickBooks displays the Profit & Loss Budget vs. Actual report with a column for each Class You can modify the report so as to include only those classes for which you have entered a budget 15

10. PAGE REF #CHAPTER 8: Budgeting/Forecasting SLIDE # 10 Creating Forecasts and Forecast Reports In addition to budgets, QuickBooks allows you to create forecasts You set up forecasts exactly the same way you set up budgets Forecasts allow you to make predictions about future income and expenses and to run “what if” scenarios to help you make better decisions about your business As with budgets, you can enter a forecast by Account, Account & Customer:Job, and Account & Class 17

11. PAGE REF #CHAPTER 8: Budgeting/Forecasting SLIDE # 11 Creating a Forecast for Accounts QuickBooks allows you to create a forecast for each account on your chart of accounts You can use forecast reports in QuickBooks and compare them to your budget and actual results Select the Company menu, then select Planning & Budgeting, and then select Set Up Forecast Select the year and proceed as for the budgets 17

12. PAGE REF #CHAPTER 8: Budgeting/Forecasting SLIDE # 12 Creating Forecast Overview Report This report is used to review your forecast information and make adjustments, as necessary, to forecasted amounts Select the Reports menu, then select Budgets & Forecasts, and then select Forecast Overview Select the forecast to be used for the report Select Account by Month report layout QuickBooks enters This Fiscal Year-to-Date as the default dates for the report 20

13. PAGE REF #CHAPTER 8: Budgeting/Forecasting SLIDE # 13 Cash Flow Projector Cash Flow Projector allows you to prepare a six- week preview of all your incoming and outgoing cash Helps in projection of upcoming shortages and to plan disbursements of cash accordingly It is system date driven, that is, it calculates from the date you use it and therefore it changes as time passes Select the Company menu, then select Planning & Budgeting and then select Cash Flow Projector 21

14. PAGE REF #CHAPTER 8: Budgeting/Forecasting SLIDE # 14 Creating a Business Plan The basic components of a business plan include a current and projected balance sheet, income statement, and a cash flow analysis The Business Plan Tool in QuickBooks allows you to develop a detailed business plan following the format recommended by the U.S. Small Business Administration Select the Company menu, then select Planning & Budgeting, and then select Use Business Plan Tool 27

15. PAGE REF #CHAPTER 8: Budgeting/Forecasting SLIDE # 15 Chapter Review Create Budgets Create Budget Reports by Customer/job or by Class Create Forecasts and Forecast Reports Utilize the Cash Flow Projector Develop a Business Plan for your business 36