As we approach a new year, it’s important to start budgeting in a way that maximizes your profititabilty. A budget is not to be thought of as a financial limitation. A budget is only a plan that outlines how you want to generate sales, spend your money, and ideas on how you can organize your business financial affairs that best suits your financial success.
If you have a good, workable Chart of Accounts, you’re on your way to a good, solid budget. Does your business need a budget? It’s up to you as the business owner. It’s a well-proven fact that putting a plan in place, along with meeting your financial and profit goals, will lead to your business’ success.
Some Basic Budgeting Tips:
- Plan your income and expenses, include your business partners, key employees, or accountability partner. The budget will reflect the priorities and goals of everyone in your organization that will work with you to meet your profitability requirements.
- To better plan your budget, look at the Robert Morris Associates Survey, the Risk Management Association (or RMA), the Dun & Bradstreet Annual Financial Statement Survey, and any other business financial statistics you can find. Look up how businesses such as yours compare to others. Use the information to make a workable plan for your business.
- Reach out to your industry trade, and professional associations. They may have surveys of their members providing you with information that could be used for benchmarking and providing you with valuable statistics.
- Place some cushion in your budget numbers, account for increased vendor pricing and unexpected repairs.
- Adjust as necessary, when you realize there are problems within your budget. You can do this by spending less and finding ways to increase your income.
Probably the most important part of budgeting is comparing your actual numbers vs. your budgeted numbers. This needs to be done on a regular basis. By hiring a virtual bookkeeper to record, reconcile, and accurately classify your daily financial transactions will ensure that you are meeting your financial and profitability goals. We are a full-service virtual bookkeeping company that specializes in assisting small businesses and startups with a range of services to help maximize profitability. If you need any assistance, feel free to connect with us right away.