McGraw-Hill/Irwin Introduction to QuickBooks Pro, 2004 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter 13 Budgeting, Forecasting, and Business Planning

Chapter 13 Textbook page ref. 2 Objectives 1. Create Budgets 2. Create Budget Reports by Customer/job or by Class 3. Create Forecasts and Forecast Reports 4. Utilize the Cash Flow Projector 5. Develop a Business Plan for your business 657

Chapter 13 3 Objective 1. Create Budgets

Chapter 13 Textbook page ref. 4 Creating Budgets 1. QuickBooks allows you to create a budget for each account on your chart of accounts 2. When you create a budget for your Profit and Loss accounts, you can include additional criteria for class or customer and job 3. 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  you can create your budget from scratch or using previous year’s actual monthly totals 657

Chapter 13 Textbook page ref. 5 Creating Budgets for Jobs 1. You can set up a separate budget for each customer or job 2. If you use Job Costing in QuickBooks, the budget by job will allow you to see comparisons of your income and expenses by job 3. Select Customer:Job on the Additional Profit and Loss Budget Criteria window 660

Chapter 13 Textbook page ref. 6 Creating Budgets for Classes 1. If you use class tracking in QuickBooks, you can set up a separate budget for each class on your Class list 2. The budget by class will allow you to see this income and expense by class in comparison to the budgeted amounts you enter 3. Select Class on the Additional Profit and Loss Budget Criteria window 664

Chapter 13 7 Objective 2. Create Budget Reports by Customer/job or by Class

Chapter 13 Textbook page ref. 8 Budget Overview Select the Reports menu, then select Budgets & Forecasts, and then select Budget Overview 666

Chapter 13 Textbook page ref. 9 Profit & Loss Budget vs. Actual by Account 1. 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 2. Select the Reports menu, then select Budgets & Forecasts, and then select Budget vs. Actual 668

Chapter 13 Textbook page ref. 10 Profit & Loss Budget vs. Actual by Job 1. QuickBooks displays the Profit & Loss Budget vs. Actual report with a column for each Customer and Job 2. You can modify the report so as to include only those customers and jobs for which you have entered a budget 670

Chapter 13 Textbook page ref. 11 Profit and Loss Budget vs. Actual by Class 1. QuickBooks displays the Profit & Loss Budget vs. Actual report with a column for each Class 2. You can modify the report so as to include only those classes for which you have entered a budget 672

Chapter Objective 3. Create Forecasts and Forecast Reports

Chapter 13 Textbook page ref. 13 Creating a Forecast for Accounts 1. 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 2. You can enter a forecast by Account, Account & Customer:Job, and Account & Class 3. QuickBooks allows you to create a forecast for each account on your chart of accounts 4. You can use forecast reports in QuickBooks and compare them to your budget and actual results 5. Select the Company menu, then select Planning & Budgeting, and then select Set Up Forecast 674

Chapter 13 Textbook page ref. 14 Creating Forecast Overview Report 1. This report is used to review your forecast information and make adjustments, as necessary, to forecasted amounts 2. Select the Reports menu, then select Budgets & Forecasts, and then select Forecast Overview 677

Chapter Objective 4. Utilize the Cash Flow Projector

Chapter 13 Textbook page ref. 16 Cash Flow Projector 1. Cash Flow Projector allows you to prepare a six- week preview of all your incoming and outgoing cash 2. Helps in projection of upcoming shortages and to plan disbursements of cash accordingly 3. It is system date driven, that is, it calculates from the date you use it and therefore it changes as time passes 4. Select the Company menu, then select Planning & Budgeting and then select Cash Flow Projector 678

Chapter Objective 5. Develop a Business Plan for your business

Chapter 13 Textbook page ref. 18 Creating a Business Plan 1. The basic components of a business plan include a current and projected balance sheet, income statement, and a cash flow analysis 2. The Business Plan Tool in QuickBooks walks you through a series of questions which guide you through the process of developing a detailed business plan for your business that follows the format recommended by the U.S. Small Business Administration 3. Select the Company menu, then select Planning & Budgeting, and then select Use Business Plan Tool 684

Chapter 13 Textbook page ref. 19 Summary of Key Points 1. Create Budgets 2. Create Budget Reports by Customer/job or by Class 3. Create Forecasts and Forecast Reports 4. Utilize the Cash Flow Projector 5. Develop a Business Plan for your business 691