Do you usually end the month wishing you had more money to put into bonuses, marketing, or even client freebies? It seems like there just isn’t enough money to do all of the things you want to do; but the thing is, there’s plenty! Creating a budget allows you to guide your money properly and produce your desired results. Directing your business cash flow is necessary, and having a solid budget helps monitor the flow. We hope you come to find that budgeting isn’t just about saving money, but about navigating how you spend your money
.
To begin the process of creating a budget, there are a few documents you’ll need to collect:
- Last year’s financials (income and expenses from income statement)
- Bills for the current year including (but not limited to for some) rent and utilities
- Information on fixed expenses or new significant expenses
- Documents telling of how sales are going this year in comparison to last year
Once you’ve gathered all of this information and evaluated it, it’s time to begin building. If you’re just starting your business journey, your process will look a bit different. However, if you’ve already established your company, here are the steps you need to take:
Step 1: Take a look at last year’s numbers and decide where you want expenses to be adjusted.
Step 2: Start thinking about the future and what those expenses will look like long term. Where can you reallocate or cut back?
Step 3: Enter values into Quickbooks Online (or your chosen accounting software – we use QBO) and start watching to see how your expenses are lining up with your budget. You will likely have to make adjustments, and that’s okay. Your budget is something you should be monitoring monthly.
If you are a new company, here are the steps you will be taking:
Step 1: Create a complete list of expenses, including fixed and discretionary.
Step 2: Decide where you can cut expenses so that you can do more than just break even. This might include bringing more money into your marketing budget in hopes of acquiring more revenue.
Step 3: Enter the values into Quickbooks Online (or your chosen accounting software) so that you can see how you are comparing to your budget. The software will make it easy for you to monitor and track your expenses so that you make adjustments as needed.
Whether your business is pre-existing or not, you will have to make adjustments to your budget periodically. When you review it, look for areas that are largely different than what you expected and figure out why. The budget will never be perfect because you can never predict every single dollar spent. It’s more important that you just check it monthly and adjust accordingly.
Creating and monitoring a budget for your business is one of the many services that GMLCPA offers our clients. While it may sound simple to create and monitor a budget, it can be time-consuming especially when you’d rather be on your feet helping clients. Our team will assist you in creating the budget from the start. We will also enter in all information into Quickbooks Online and create monthly reports to review with you and discuss areas that need to be updated. Our job is to create the budget, track and monitor it , and adjust it to ensure that you are getting the most from your money.
Maintaining the budget all on your own can be a considerable amount of heavy lifting, but we are available to do the heavy lifting for you. We want to create a balance for you that allows you to know and understand your budget, but also not get wrapped up in the nitty gritty of it all. You didn’t become a business owner to crunch numbers, after all, you started your company because you have a passion.
If you’re in need of a budget but don’t want it to take away from your focus, visit our Contact Us page and send us a message. We’d love to get started helping you budget your expenses and even find extra money to put to good use.
