How to Use QuickBooks Reports for Better Financial Forecasting

October 30, 2015

quickbooks financial forecasting

Step four in the Achievable Ten-Step Plan to Winning Financial Success in Business is to create a financial forecast. Financial forecasting helps you know where your business is headed in order to prepare for the future. Let’s discuss how to use QuickBooks reports for forecasting (using Quickbooks Desktop 2015).

If you are using Quickbooks for your financial accounting software, a forecast report can be created by fiscal year on a monthly basis for the Profit & Loss statement. You can build “what if” scenarios to see where you may be in the next several months. You can change the forecasted template amounts at any time. Should you need to start a fiscal year template over, simply use the Edit Menu and click on Delete Forecast.

IMPORTANT: The forecasting template and output is dependent on your Chart of Accounts being set up correctly for your business and on your transactional data being entered correctly to the right accounts.

Access the Set Up for a Forecast in QuickBooks

To access the set up for a forecast in QuickBooks, go to the Company Menu, highlight Planning & Budgeting, and click on Set Up Forecast. If you have not set up a prior template, it will take you to Create New Forecast.

create a new forecast in quickbooks

If you have an existing Forecast set up, then the list of previous Forecast Templates will show. You can scroll to locate the template year you want. You may then make revisions if you want or simply complete the template if you had to leave in the middle of the initial setup. If you want to set up the next year’s template, simply click the Create New Forecast button in the upper right hand corner.

Create_New_Forecast.jpg

On the Create a New Forecast screen, the first instruction will be to specify the year you want. Click Next and then decide, if you are using Classes and Customer: Jobs, if it is important to you to also forecast by these two criteria.

I suggest starting out with a basic forecast and click the No Additional Criteria button. Clicking Next will take you to the choices of how you want to begin to fill in your template.

Fill in the Forecast Template

You have two options for filling in your forecast template:

  1. Create From Scratch: Your Chart of Accounts will pre-fill the template, but there will not be any amounts.
  2. Profit & Loss Statement: The second option allows the data from last year’s Profit & Loss report to pre-fill each monthly column. Then you can change only the data you want, while leaving the other amounts as they were from the previous year.

Click on Finish and you will be taken to the template. At the bottom, there are two tools to assist you in filling the template. The first is Copy Across. This tool will pre-fill the rest of the columns with the same amount in the column you are currently in. The second is Adjust Row Amounts. This tool leads you to additional choices. Don't be afraid to play around with these options to see what works for you.

Once you have completed your template, you can then pull up two reports:

  1. Forecast Overview
  2. Forecast vs. Actual

Go to the Reports Menu, highlight Budgets & Forecasts, and click on Forecast Overview. This is your template in Report form.

The second report, Forecast vs. Actual, will show actual amounts compared to forecast amounts and includes the $ Over(Under) Forecast and the % of Forecast columns.

Export Your Financial Forecast Report

Now that you know how to set up forecasts in QuickBooks, let's export the reports. These two reports can be exported to Excel for further scenarios and for combining months that cross over fiscal years. If you export to Excel, be sure to turn on the Auto Outline option in the Advanced Tab. This allows you to roll up your sub accounts for a more compact report.

Now your business can be better prepared for the obstacles and opportunities ahead—and you’re one step closer to financial success. Happy Forecasting!

cash management guide

Topics: Accounting & Finance

Margie Monroe

Margie Monroe, CPA, LLC

Margie has been a CPA since 1980 and has always enjoyed assisting people. Whether it was her early years in both public and private accounting or her twenty plus years working with nonprofit organizations. For the last ten years, she has assisted businesses and individuals with their accounting needs using QuickBooks Pro, Premier, Enterprise, POS and Online through Margie Monroe, CPA, LLC. She can be reached at margie@margiemonroecpa.com.
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