Small business budgets tend to get relegated to spreadsheets, word processor documents, or even old-school ledger books. This does not have to be the case. As of version 2.4, GnuCash offers an incredibly helpful budget tool. GnuCash is available for Windows, Linux, and Mac.
Before you create your budget in GnuCash, you need to consider what you’ll be budgeting for, what accounts you’ll use, the budget’s date range, the budget period (monthly, quarterly, etc.), and more depending on what you want to track and report on in your budget.
Setting up your accounts in GnuCash
After installing GnuCash, one of the most important steps is selecting the types of accounts to set up for your company. (The instructions for this section are from my 2011 post about using GnuCash to do accounting on a shoestring budget.) Instead of just setting up a standard checking account, you should add Business Accounts from the Categories table (Figure A).
Click the image to enlarge it.
When you select Business Accounts, the setup wizard will display all of the accounts and sub-accounts that will be created.
During the setup wizard, you can add as many accounts as you need. Depending on your business, the following accounts might be necessary:
- Common Accounts
- Fixed Assets
- Investment Accounts
- Other loans
GnuCash has a tab-based interface and is quite simple to use. Although there are no user-configurable home screen buttons, GnuCash has user-friendly drop-down menus and expandable navigation trees (Figure B).
Click the image to enlarge.
Figure B shows a New Budget. You can create budgets based on any accounts included in the data file.
Creating a budget in GnuCash
In GnuCash, select the account with which you want to associate the budget. I’ll demonstrate this with a dummy account I created and associate the budget with the National City account (Figure C).
My dummy Chart of Accounts is ready for action. (Click the image to enlarge it.)
With GnuCash open, select Actions | Budget | New Budget. This will open a tab with your accounts open in an empty budget format (Figure D). Now you have to set up the budget.
A Budget tab has been created. (Click the image to enlarge.)
Right-click anywhere in the Budget tab and select Budget Options. In this new window (Figure E), you need to configure the necessary options for the budget you want to set up. The options include: Budget Name, Notes, Budget Period, Number Of Periods. The Budget Period section of the options is important. Not only are you setting up the budget’s start date (you can backdate it), you are also defining the interval for a period and how far out you want to track the budget.
Name the budget appropriately, so it’s easier to find later. (Click the image to enlarge it.)
With your options set, click OK, and you’re ready to populate the budget with data. There are two ways you can do this: input data manually or use the GnuCash Budget Estimator. To manually enter data, double-click a cell and enter the data. To use the Estimator, do the following:
- Select the account you want to use (within the Budget tab you created).
- Click the Estimator icon in the toolbar (it’s the second icon from the right).
- In the resulting popup, enter the start date and the significant digit.
- Click OK.
After you click OK, GnuCash will use transactions from that account (based on the dates) to auto-populate the budget data (Figure F).
Estimating budgets based on numerous accounts. (Click the image to enlarge.)
Creating a budget report in GnuCash
You can run a budget report by selecting Reports | Budget | Budget Report. When the report generates, you need to set some options. From the Budget Report tab, click the Edit Report Options button in the main toolbar and, in the General tab (Figure G), select the budget you created from the Budget drop-down. Then you can configure the report to better match your specific needs from the other options.
There are plenty of options to define for your budget report. (Click the image to enlarge it.)
These budget reports aren’t the prettiest you will ever see, but you can customize the reports if you’re willing to do a bit of hacking.
Note: GnuCash doesn’t offer multi-user mode features.