Budgeting in Business

How many people have family budgets?  I know we do.  It is an important part of our financial health to make sure that we take care of our day to day spending practices.  It assists us in the meeting of our financial goals as a family as well as making sure we’re not spending our funds on frivolous things all the time and are able to meet our bills… a necessity for any family for sure!

But what about your business?  Do you have a business budget or do you just take it as it comes?  Do you spend your expense funds appropriately getting the most results for the amount of money you spend or just kind of throw money where it seems to be needed at the time?

Well frankly, it’s a risky road to take and an unnecessary risk not to budget your business.  Funds are tight with small businesses, we don’t have the big corporate budget we’d all like to have, necessary expenses like administrative assistance, bookkeeping, general office overhead, telephone lines, website expenses, travel expenses, networking expenses, meals and entertainment, promotion and advertising are just some of the areas that you may very well wish you had a better grasp on financially!

What is the acceptable amount to spend in each of these expense areas?  What goals are you trying to achieve by paying for these daily expenses?  “How’s it working for you?”

By creating an annual and monthly budget, you truly keep your business spending more in line with your actual goals.   An obvious goal would be to eliminate the unnecessary spending, but in order to do that we must first analyze where and how you are spending your funds.

QuickBooks and some other accounting programs actually provide a module allowing us to put the budget in for you so that you can compare it to your Income Statement (Profit & Loss) and the rest of your financial statements so that you can see how much of your budget you have used to date, how much you have left to spend and are you in line with what was set out for your spending?  If you are over spending, we can analyze why you are spending more than previously allotted. Has your business grown and thus you are incurring higher overhead expenses?

Budgeting also allows us to further plan for growth within your business and the meeting of financial goals!  The end result always being to increase profitability and get the most “bang for your buck”.  We look into your previous spending habits,needs and wants and start building a budget from there!  We also sit down and consider plans and the goals of the business to make sure we maximize the spending so it profits your business!

Be a smart business owner and as we approach 2011 make it a goal to prepare a budget for the upcoming year.  For assistance, please do not hesitate to contact FAYEZBOOKKEEPING and we will be delighted to sit down,prepare one with you and help you keep your business spending in line!

We truly are your partner in financial management and growth!