Budgeting

Budgeting Overview and Settings

Budgeting is an optional feature that allows you to set category targets and track your budget vs actual spending. It is controlled by the Budgeting toggle on the Settings page. By default, it is disabled, but can be enabled using the toggle.

When Budget is enabled:

  • The Budget page appears in the main navigation toolbar, allowing you to set category and summary P&L targets, e.g. Total Revenue, Gross Margin, Net Income, etc.
  • The P&L page displays Budget as an option in the Compare To dropdown, so you can compare your actual spending to your budgeted amounts.
  • The Dashboard page shows Over Budget and Under Budget widgets so you can track the categories that are most over and under budget for a particular period.

Monthly vs Annual Budget Methods

On the Budget page, you can choose between two different budget methods: Monthly (same amount for each month) or Annual (amounts for each calendar month). The Monthly method is the simple, default approach, since it is easier to manage and update a single amount for each category. However, you may want to use the Annual method, which is useful for seasonal businesses, since you can adjust certain categories to account for higher or lower revenue and expenses in particular months of the year (e.g. holiday sales, seasonal labor, etc.).

The first time you switch to Annual, current monthly amounts are copied into all twelve months; after that, monthly and annual plans are stored separately. When editing a month in Annual mode, you can apply that amount through December or to all twelve months using the choices next to the input.

Default Budget Values

Default budget amounts are automatically populated based on the average of the past three months per category. This is provided as a starting point, not budgeting advice, so you should update these amounts to reflect your actual business operations and future expectations.

If you ever want to revert budget values to your 3-month averages, press the Recalculate button on the top of the Budget page.

How To Set Budget Goals

A useful business budget is a plan for where cash should go, not a copy of last month’s performance. Start from your operating goals (growth, margin, cash runway, hiring, marketing pushes), look at recent history for a baseline, then adjust for what you expect next: seasonality, price changes, new channels, or one-time projects.

How to think about the numbers:

  • Set Revenue (and related) targets that match what you believe you can sell, not only what you hope for
  • Size COGS and key Operating Expense lines so Gross Profit and Operating Income are realistic
  • Make sure your transaction categorization is clean before setting budget goals, so the historical values on the Budget page are helpful reference values
  • Start with the Monthly method if you're new to budgeting or have a stable business, or Annual when certain months routinely look different

When to update your budget:

  • At the start of a month or quarter when the plan should change
  • After a large win, loss, price change, hire, or campaign
  • When you are consistently far over or under a line (fix the plan, the categorization, or both)
  • Seasonally if you use Annual budgeting (e.g. holidays, summer demand)

BudgetBadger helps you create category and P&L targets, compare actual vs budget results on the P&L page, and spot over/under categories on the Dashboard. However, it does not provide personalized financial, tax, or investment advice.

Treat defaults and Recalculate as a starting point, then set amounts that match your judgment and, when needed, contact your CPA or advisor for personalized advice.