Using Your Budget as a Tool – Two Methods for Accomplishing This

There are two primary methods for using your company’s budget as a tool. The first is to load your budget numbers directly into your accounting system. The second is to use a spreadsheet to track your firms’ budget versus actual performance.

Most of the popular small business accounting software packages allow you to enter your budget directly into the software. These programs have built-in budget variance reports that allow you to see how your firm’s actual performance is when compared to the budget you prepared.

Spreadsheets are a popular means of externally tracking your budget variances. This is my preference for budget variance reporting, because it allows you a level of flexibility and customization that is not possible with small business accounting software packages built-in budget reports. The only downside to this method is that you have to import the actual performance data into the spreadsheet (either manually or through macros). For me, this downside is outweighed by the flexibility you have when you use a spreadsheet for budget tracking.