During a recent ECCU budgeting webinar for ministries with up to $2 million in revenues, we asked attendees which accounting package they used. Two thirds said QuickBooks.
It has been my experience that many QuickBooks users don’t fully utilize its functionality. If this is true of you, here are several tips that may prove helpful as you go through the budgeting process.
First, make sure you have a good chart of accounts. Keep it simple and relevant. Use categories that can be applied across ministry and operational areas. Also, create a structure that allows you to condense various line items into a summary category when reporting to your leadership or board. An example of this would be the summary category called “program expense,” which would contain a number of lower-level line items, as shown in the lower left of this screen shot.
Next, identify the distinct ministry and operational areas that will constitute your classes. You will use these classes to structure your budget and prepare budget-to-actual reports each month. Don’t go overboard here, but create enough classes so you can produce meaningful reports for each area, like this:
Finally, create your budget using the set up budgets feature. Now you can begin using your chart of accounts and class structure to document the budget. After you’ve completed all the ministry areas, you can run an organizational report that presents the budget based on your chart of accounts and areas (classes) with totals for the entire ministry. You can also run budget-to-actual reports for specific ministries.
If you’d like more budgeting guidance, check out our Budgeting 101 webinar recording and additional resources, including additional tips for QuickBooks users.