You’ve probably been told many times that your business should have a budget.
But do you really know why?
What Is Budgeting?
A budget is an estimate or prediction of your business’s income for a set period of time (week, month, quarter, etc.), and an estimate of your business’s expenses for that same period of time. In other words, it’s a record of what you expect your business to earn, and a plan for how you will spend your business’s money.
The Power Of Budgeting
Budgeting helps you to balance your business’s expenses and income, so you can ensure that you aren’t spending more than you’re earning. However, to get the most out of budgeting, you also need to identify and analyse your budget variances.
The Power Of Variance Analysis
A budget variance is the difference between your business’s forecast and actual expenses and income. By analysing any variances, your bookkeeper can help explain how and why they occurred. This information empowers you to then implement changes that prevent variances from reoccurring, saving your business money, and increasing its profitability.
Your Business Budget
Do you want to cut costs and improve profitability by taking control of your business’s finances? Then you need to invest in budgeting and variance analysis. Contact EzyAccounts today on 1300 313 397 so we can discuss your business’s unique budgeting needs.
Your business may require an organisational budget, project-based budgets, or both.
An organisational budget considers your business as a whole. This is useful if your income and expenses are fairly predictable.
A project-based budget, on the other hand, is useful for businesses with varying and unpredictable incomings and outgoings – such as a construction business relying on contracts for large projects. A project-based budget is created at the beginning of each project. You may run multiple projects – each with their own budget – at the same time. But by having project-based budgets, you are able to manage your money and cash flow, so your business can avoid any nasty financial surprises.
Your bookkeeper can advise on which type of budget is best suited to your business. To learn more, call EzyAccounts today on 1300 313 397.
Do you need assistance with financial controller services, day-to-day bookkeeping, payroll management, or cash flow forecasting? Our local bookkeepers are qualified to help you with these and many other bookkeeping tasks. Click on the links to learn more today.