Businesses of all sizes need to be budget savvy, but small businesses especially need to learn how to properly budget, since they generally don’t have the fiscal knowledge or deeper pockets of their larger counterparts. Business owners struggling to find balance in budgeting will benefit significantly from insights provided during our one of our recent #QBOchat sessions.
What is the best advice for businesses who’ve never created a budget before?
Before putting numbers on paper, businesses need a solid grasp of their vision and future goals and to realize budgeting isn’t only about expenses. Forecasting revenue is equally pertinent, as well as, forecasting other cash in and outflows that don’t end up on an Income Statement. Budgets require careful planning, collaboration, and buy-in from management teams. Business owners should research and gain knowledge on how to get started with budgeting and a great place to begin is with this informative article from Inc., “How to Start a Business Budget.”
What important factors should businesses consider when developing a budget?
Rather than viewing budgeting on the micro-level (their business only), they should take into account industry trends and historical numbers. Businesses need to understand variable costs to effectively project those costs with changes in revenue, and rather than limiting projections to the next fiscal year, they should consider keeping running projections. Check out Investopedia’s great article, “Six Steps to a Better Business Budget” for more detailed information on developing a business budget.
What are some ways budgets impact the performance of a business?
A properly planned budget relieves stress of the unknown. It also serves not only as a planning roadmap of where businesses are headed, but as a way to help them get out of debt or tight crunches. Budgets give businesses a clearer picture of reality by revealing waste or faulty assumptions, allowing them to correct those issues before they lead to unmanageable problems.
What kinds of software and apps are recommended to help businesses with the budgeting process?
Quickbooks software, both Desktop and Online, is excellent for running comparative financial statements to learn about trends, and QuickBooksOnlinehas unlimited budgets and great reporting to help after businesses have their budgets in place. Apps like LivePlan, BilBus, Bode Tree, and StratPad, easily found on the Intuit website, are some of the most efficient apps to help with the budgeting process, and the U.S. Small Business administration has a wealth of resources, including this handy article, “How to Build and Use a Business Budget That’s Useful All Year Long.”
Takeaways and Tips for businesses after they develop their budget
The business budget is merely a starting point for dialogue, and it’s essential to keep the internal lines of communication open. Re-evaluate the budget quarterly to gauge the accuracy of previous assumptions, and hold department managers responsible by providing them the budget as opposed to just reports.
Stay current with the latest about QuickBooks Online by joining us for our weekly fun and informative #QBOChat’s on Twitter, every Thursday at 3:00pm EST. We welcome all types of QuickBooks users, from small business users, accountants, developers and others. Check out our Storify for previous #QBOchats and for a better chat experience, Join us here. We hope to see you this Thursday!