Budgeting is the best way to know where you are going and to tell your employees where you want to take your business. Budgets set goals for your sales team, put controls on spending and tell you as the owner / manager how profitable your business will be. Once a budget is in place it can be used to feed information into your cash flow. If your business has changes in its direction or structure you can amend your budgets and see the changes to your cash flow. You now have a greater understanding of your business.
Budgets should be reviewed monthly. This can be done by entering a budget into accounting software, like MYOB, and printing an Actual versus Budget Profit and Loss Report at the end of each month. This is an effective way of ensuring money does not get lost or wasted.
We can customise budgets to suit any type of business and they can vary from simple budgets to complex detailed analysis of the business.
Many small businesses say it is difficult to know what their income will be, so we can get around this by looking at your fixed and variable expenses and then determining a break-even amount. This will then work as your sales target.
In good times it’s easy to ignore Profit and Loss because there is plenty of income, but when times get tough it’s important to look closely at where the money is being spent.
Six Steps To A Better Business Budget
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by Glenn Curtis
You've just purchased or opened a small business and you know your trade, but when it comes to bookkeeping and, more specifically, budgeting, your skill set is lacking. It's OK - the good news is that it is possible to come up with a budget, or at least a good estimation of what will be needed in terms of dollars and cents. Read on for six simple tips that will help you put together a top-notch small business budget.(To read about large corporations' budgets, check out How Budgeting Works For Companies.)