“Don't tell me what you value, show me your budget, and I'll tell you what you value.” Or so says Joe Biden. If you look at budgeting closely, you will realise that this statement indeed rings a lot of truth in it. When we do our budget, we prioritise spending. And yes, as we exercise our discretion, it is inevitable that we focus on what we deem is most important.
But then again business organisations are complex and you may need to shift gears sooner than you think. When that time comes, how do you redo your existing budget?
There is no single formula to follow where budgeting is concerned. there are many different factors to consider, with company size, industry and current financial status topping the list. But while you cannot dictate a single way to set parameters on your budgeting functions, what you can do is to make sure that your budget possess the characteristics of the ideal business financial plan.
More than anything else, your budget plan should be based on realistic expectations. Understandably, saving on some unnecessary expenses and keeping some cash stashed away for a rainy day is a good way to go. But even so, you should stick to feasible business financial plans. Make your estimates close-to-accurate so you won’t end up with a problematic cashflow.
Whatever you do with your business financial plan, make sure that it is as orderly and organised as possible. Document everything - that will help a lot. Keep receipts and invoices on hand. Monitoring these things will help you arrive at a close estimate of all the payment you need to settle on a regular basis.
For a more thorough way of keeping your financial data organised, you can also opt for modern bookkeeping and accounting tools. Such tools will help you see your business financial activities, generate financial statements and yes, it can also help you with your budget plan.
Before you do your budget, you must see be very clear on its primary purpose. Only then will you be able to come up with a well-devised, well-targeted business financial plan. Keep your eyes on a fixed business financial goals and you’re already one step ahead.
If your budget plan isn’t working, the best course to take is to redo your budget. A better and more improved budget plan will help you make your business finances run smoothly.
For more advanced finance and accounting services, you may get in touch with our qualified advisers.