In the video, I walk you through entering in a budget in QuickBooks Online. It was easier than I expected. Here are the couple of things I learned while making the video:
Balance Sheet Budgets are possible…but useless
I was kind of excited when I saw that you can setup a Balance Sheet Budget. I thought this would be helpful if you are concerned about Cash Flow or maybe have a goal of paying down debt. You can enter the budget, but is there a way to actually run a report using that budget? Not that I’m aware of.
Maybe there are plans to make this useful in the future. Wouldn’t it be cool if you would get a notification if your check falls under the budgeted amount?
Cash Flow is pretty useless
I was really hoping that cash flow would look at your historical activity and make projections based on that activity. Instead, it seems to just look at your recurring and upcoming transactions. That is not helpful at all. I can manually go into Cash Flow and add items…which seems like more work than help.
Multiple Budgets is the way to go
What I plan on doing is keeping my official budget that was approved at the annual meeting. I then will keep a second budget that will be used to help project how the year will end. Here’s how I will do it:
- Duplicate Budget: When you go to Budgets, you can click the arrow next to your budget on the far right. Select Duplicate.
- Include Actual Income/Expenses: Once a quarter, I’m planning on overwriting the budgeted amounts with the actual amounts for each month completed.
- Update Future Budgeted Amounts: As time goes on, you will know more and be able to make a better estimate of how the remaining months will go. For example, maybe giving has been up by close to 10% each month. Why not update the future months of budgeted income to show this continuing until the year end? Suppose you find out that your snow removal person notifies you in August that they are going to increase their rate. Why not update the Snow Remove budget for October, November, and December to account for this? This will give your leaders better information for making decisions.
Conclusion
QuickBooks Online is a long ways off from being able to help with some of the more complicated tasks of an accountant…such as making estimates based on past activity or managing cash flow. I wonder if QuickBooks will also try to integrate AI into their products? That may help with these issues but would raise other concerns. For now, QuickBooks is unable to replace the insights from a competent treasurer.
Useful Links
- My Budgeting Series: https://www.youtube.com/playlist?list=PLy3_Fkz8_LMqNE_pFwHxcnvr9uzvirb-T
- Subscribe to my blog: https://jctaccounting.com/subscribe-and-connect/