Budgeting Concepts
Business Budgeting is good practice for organizations who would like to
prepare for what revenue they will derive from activities and how this will
be spent. It is also beneficial to monitor your income and expenditure as
they occur to determine how you are tracking with what you budgeted. This
is often known as Forecasting.
This might seem impractical when a business is small, but it is the same as
not having a personal budget. How do you know where you are spending your
money, what improvements can be made and if you are getting where you want
to go?
As a business grows so the number of people, resources and activities
increases, making the whole process a lot more time consuming and difficult.
So it is important to start the practice of budgeting as soon as possible so
you budgeting can grow with your business and help it grow.
Budgeting is the financial health check for your business and should be an
important part of your process. Many businesses fail due to lack of
planning and good management. By taking a little time regularly, budgeting
can add a powerful dimension to your decision making.
BizBudg has been designed to make the budgeting process as easy as possible
so that anyone can do it. You don't need to be an accountant or even spend
much time at all to get started and keep your finances up to date
Bizbudg has all the power of big software, made easy and affordable for
anyone.
Don't put it off, start budgeting now! www.bizbudg.com/signup.html Start Bizbudg
Sometimes it is hard to see the forrest for the trees and budgeting can be like that.
Get back to the purpose of budgeting...planning for your business financially.
Budgeting for business is usually either performed with spreadsheets or expensive software, or often a combination of both.
As more people become invovled the process can become entrenched in an organization, where a bad process can be considered better than having to change to an unknown process!
Budgeting should be simple so that it is a value adding task in an organization, where a small amount of time is spent creating budgets and more time is spent managing budgets and making decisions based on estimates, tracking and changes to suit conditions.
Either a finance person or area of a business sets budgets and delivers them to those who must manage the budget. This is often due to ease of process.
A better process is to include those who manage budgets (shop or office managers) in the creation and management so that decision makers are advised of real income and expenses and can provide collaboration in the process.
To successfully manage finances at the start of each financial year, budget managers should:
1. Create budget templates for the organization
2. Open the budget for entry of data by all relevant staff
3. Close the initial budget to view consolidated data
4. View and adjust initial estimates with management to finalise
5. Add actual spending at the end of each month
6. Review variances of estimated budget with actual and adjust remaining months to suit
7. Be dynamic in decision making using live data to maximize business financial health
Budgeting is the task of planning the financial future of an entity, whether it is personal or a business. Smaller businesses tend to neglet this important activity due to lack of resources and
setting and managing budgets being too difficult to understand and time consuming. Not knowing the financial position and direction of a business, though, is one of the main causes of business failure.
It doesn't need to be difficult, so either starting to budget or changing to a practice that takes minutes instead of hours/days will give your business the greatest chance of success.
Big Business have their unique set of issues when it comes to budgeting. As more people and places become involved budgeting requires more effort and becomes more complicated, so a sophisticated and complex solution is required....or is it?
It is easy for small business to neglet budgeting as it is often too far removed from business owners skillset and does not yield the value for the effort required, not to mention that it not fully understood.
Here is some reading for you:
Starting a Successful Small Business
About Budgeting
Small Business Budgeting
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