How to Create Budgets in QuickBooks Online for Nonprofits

A budget helps you plan how much money you expect to earn and spend. It also helps you catch problems early, before they turn into big problems. If you run a nonprofit, a solid budget in QuickBooks Online can show you exactly where you stand each month.

Here is how to set one up, step by step.

Step 1: Check your fiscal year

Before you build a budget, make sure your fiscal year start date is correct. Go to the Gear icon, then Account and Settings. Click Advanced. Look at the First Month of Fiscal Year field. Fix it if it is wrong.

Step 2: Go to the Budgets page

Click Reports on the left side menu. Then click Financial Planning. Then click Budgets. If you have never made a budget before, you will see a button that says Create Budget or Add Budget.

Step 3: Choose your budget type

You can pick Profit and Loss or Balance Sheet. Most small businesses use Profit and Loss, since it tracks income and expenses. Pick the fiscal year you want to plan for.

Step 4: Decide how detailed to make it

If you want one big number for the whole company, choose Consolidated. If you want to break it down by location or by class, choose Subdivided. Nonprofits often like to subdivide by program, so they can see how each program is doing on its own.

Step 5: Enter your numbers

Type in your expected income and expenses for each account, month by month. You can start from scratch, or you can let QuickBooks pull in last year's actual numbers as a starting point. Then adjust those numbers based on what you expect this year.

Step 6: Save it

Click Save. Your budget is now live in QuickBooks Online. You can go back and update it any time.

How to Run the Actual vs Budget Report

Once your budget is saved, the real value comes from checking it against what actually happened. QuickBooks Online has a report built just for that.

Step 1: Open the report

Go to Reports. Search for "Budget vs. Actuals" in the search bar, or scroll to the Business Overview section and click it there.

Step 2: Pick your budget

If you have more than one budget saved, choose the one you want to run.

Step 3: Set your dates

Pick the time period you want to look at. This could be one month, one quarter, or the whole year.

Step 4: Choose cash or accrual

Decide whether you want to see this on a cash basis or an accrual basis. Most nonprofits run this on accrual, since it matches income and expenses to when they actually happen, not just when the cash moves.

Step 5: Customize if needed

Click Customize if you want to filter by class, location, or customer. This step is optional. It helps if you subdivided your budget earlier.

Step 6: Run it

Click Run Report. You will see your budget numbers sitting right next to your actual numbers, with the difference shown too. That difference tells you fast where you are ahead of plan and where you are falling behind.

Step 7: Export it, if you want

Click the Export icon at the top of the report, then choose Export to Excel. This comes in handy when you want to share the numbers with your board, your partners, or your accountant.

Need Help With Your Budget?

Setting up a budget takes a little time. Reading the results and knowing what to do about them takes practice. That is where Revamp Your Finances LLC comes in. We help nonprofits turn these numbers into decisions they can actually use.

If you have any questions, let me know.