Set Up a Budget in QuickBooks

It’s that time of year when business owners start thinking about the end of the year, as well as planning for the next year.  For many small business owners, that includes a budget. QuickBooks includes a budgeting tool that can help you build a budget either from scratch, or based on prior year actual figures.

These instructions work whether your company is set up on a calendar year, or a fiscal year.  The months that display will follow what has been set up as your fiscal year in Company Set Up.

1.      Go to Company→Planning then Budgeting→Set Up Budgets
















2. Click the Create New Budget button to create a new budget.

This opens the Create New Budget dialog box, which you use to create a new budget.












3.      Select the fiscal year period.

Identify the fiscal year you’re budgeting for. To do that, enter the fiscal year in the provided text box. If you’re budgeting for fiscal year 2013, for example, you use those buttons to change the year to 2013.

4.      Select the Profit and Loss radio button or the Balance Sheet radio button, depending on what type of budget you want to create.

If you’re creating a profit and loss budget, click Next. If you’re creating a balance sheet budget, click Finish to complete the budget.

There is a difference in the way you budget each of these. For profit and loss budgets, you budget the amount of income or expense expected for the account for each month. For balance sheet budgets, you budget the ending account balance; that’s the ending account balance expected for each account at month’s end.  For example, you expect your bank account balance to be $10,000 at the end of January, and $15,000 at the end of February.

5.      Specify additional profit and loss budget criteria and click Next.

If you chose to create a profit and loss budget, select the Customer:Job radio button to further extend your budget to include Job details, or select the Class radio button to include classes in your budget. Or simply select the No Additional Criteria radio button.













6.      Choose whether to create the budget from scratch or previous data.

To create a budget from scratch and start with a clean slate, select the Create Budget from Scratch radio button.

To create a budget based on your actual data from last year, select the Create Budget from Previous Year’s Actual Data radio button.














A note for creating a budget from previous year’s actual data: 

Let’s assume you are working on the budget for the upcoming year (2013) in the current year (2012). When you click on “Create budget from previous year’s actual data”, QuickBooks will pull data from 2011 (previous year) since the current year is 2012. 

A work around is to click on the clock on your computer (usually in the lower, right corner of your screen) and change the date and year to the next year (2013 in this example).  After you create your budget set you clock back to the correct year.  (Thanks Michelle Long for the tip!)

 7.      Click Finish when you’re done.

 QuickBooks displays the Set Up Budgets window.



8.      Select the Current Class or Job you are budgeting for (if applicable)

9.      Enter the amount for the monthly budget in the first month column, not the Annual Total column.  This field totals automatically.

10.  If that amount is the same for the entire year, click on Copy Across and that number will be copied to all cells in that row for the year.

11.  Clicking on Adjust Row Amounts gives you the option to adjust rows by dollar amounts or percentages.  You can also just click on any amount and adjust as necessary.










12.  Click on Save when you are finished.

To print the various budget related reports, go to Reports→Budgets & Forecasts.

You can delete any budgets you create, so have fun!

Louisiana Sales Tax Holiday 2012 & QuickBooks

July 18, 2012 · Posted in Business Tips, QuickBooks Help, Sales Tax · Comment 

Retailers in Alexandria, LA and all across the state should be preparing for the state’s sales tax holiday scheduled for Friday, August 3 and Saturday, August 4.  This is a ‘holiday’ from paying state sales tax on most retail purchases.  Shoppers can expect to save $3.63 million this year, and retails can expect a spike in sales, but what does this entail for you, the small business owner?

The Rules

Here is a link to the state’s website.  But, if you’re like most people you’re not into reading tax topics, so I’ll summarize it for you.

The sales tax exemption applies to the first $2,500 [Type a quote from the document or the summary of an interesting point. You can position the text box anywhere in the document. Use the Drawing Tools tab to change the formatting of the pull quote text box.]

  •  of the purchase price of most individual items of tangible personal property for personal use only.
  • This applies to 4% state sales tax only.  You must collect Rapides Parish sales tax as normal.


  • The sales tax holiday does notapply to:
    • Vehicles subject to license and title;
    • Meals prepared for consumption on premises or to-go (fast food and restaurants);
    • Taxable services such as hotel occupancy, laundry services, printing services, telecommunication services, the furnishing of cold storage space, leases or rentals of tangible personal property, repairs to tangible personal property, and admission to athletic, amusement, or recreational facilities or events.


Tax Tip for School Expenses!


The timing of this sales tax holiday is just in time for back to school shopping.  So, save those receipts for school supplies, uniforms and educational equipment required by schools. These expenses may be eligible for tax deductions on 2012 Louisiana Individual Income Tax Returns due May 15, 2013. To claim the deductions, you must be able to claim the student as a dependent on your state individual income tax return, and you must be able to provide documentation for the expenses.


What about QuickBooks?


That’s all easy enough to understand, but how to you set up QuickBooks Point of Sale, or QuickBooks Financial to track this properly?  After all, you’re required to report how much of your sales are tax exempt as a result of the holiday on your sales tax return.


Point of Sale 10.0 (not exporting to financial)


If you sell items over the $2,500 exemption limit you will need to add three tax rates.  If not, you’ll just need to add two.


In File – Preferences – Company select Sales Tax then:

  1. Add Tax Location – I like to use Sales Tax Holiday;
  2. Select Shipping to the location is taxable using the tax code – Non (or whatever applies to your store), then OK;
  3. Under the new Sales Tax Holiday tax location select Edit Tax Code;
  4. Enter tax code – I like to use HOL for Tax Holiday;
  5. Use tax code mark H to help identify non-taxed returns;
  6. Select Multi-rate tax;
  7. Set up the tax component for sales under $2,500;
    1. Enter the same tax component that you use for other state taxes, for example – State of LA;
    2. Tax rate will be 0%;
    3. Enter the same tax agency that you use for other state taxes, for example – LA Dept of Revenue;
    4. Click Apply this rate to a specific item price range:;
    5. Enter 0 to $2,499;
    6. Click Apply tax to the amount of an item’s price within this range
    7. Select Add another tax rate;
  8. Set up the tax component for sales over $2,500 (if applicable);
    1. Enter the same tax component that you use for other state taxes, for example – State of LA;
    2. Tax rate will be 4%;
    3. Enter the same tax agency that you use for other state taxes, for example – LA Dept of Revenue;
    4. Click Apply this rate to a specific item price range:;
    5. Enter $2,500 to your highest priced item;
    6. Do Not click Apply tax to the amount of an item’s price within this range
    7. Select Add another tax rate;
  9. Set up the tax component for Rapides Parish;
    1. Enter the same tax component that you use for other state taxes, for example – City of Alexandria;
    2. Tax rate will be 5%;
    3. Enter the same tax agency that you use for other state taxes, for example – Rapides Parish Sales and Use Tax;
  10. Click Finish;
  11. At the beginning of the sales tax holiday set the Default tax location to Sales Tax Holiday.  At the end of the holiday set the default tax location back to the normal setting.


QuickBooks Financial


If you don’t use Point of Sale you can follow these instructions.  You’ll need to set up a new sales item, and sales tax group.  First you’ll add the item:

  1. Click Lists, then Items List;
  2. Right click anywhere on the screen, then New;
  3.  Choose the Sales Tax Item type from the drop-down;
  4.  Give the item a name, and description such as LA Sales Holiday;
  5. Type is a 0.0% Tax Rate, and enter the same tax agency you use for other state taxes, for example – LA Dept of Revenue.

Now add the sales tax group:

  1. From the Item List right click anywhere on the screen, then New;
  2. Choose Sales Tax Group from the drop-down;
  3. Give the group a name, and description such as Sales Tax Holiday Group;
  4. Add the LA Sales Holiday, and correct Parish sales tax items to the group.

When creating Invoices, or Sales Receipts, you will have to remember to go to the Tax Box at the bottom of the form, and choose from the drop-down the new sales tax group tax code you’ve just created.

The exception to above is if you have only one or a few customers and you wish to edit the customer’s default tax code on their Additional Info tab. Just remember to change them all back to their taxable status after the holiday!

Whew!  That’s a lot to remember. And we still have not addressed how to report this on your sales tax return, or how to handle lay away, and deliveries.   If this is just too much to take in, or you’re just not inclined to take this on, feel free to contact me for help.  You will be eligible for a tax credit on your sales tax return if you hire outside help to program your system for the change in sales tax rates.

There’s more than one way to skin a cat.  Do you handle this differently?  I’d love to hear from you!  Please comment below.