Whether you are a new business owner or have an older company, it is important to maintain an annual budget. By creating an annual budget for your business, you will provide a guideline for the company’s expected income as well as expenses and enable you to compare your estimated business with the actual numbers. An annual budget will serve as a scale for how your business is performing. An annual budget will also help you see where changes should be made.
You can create a budget on paper, or using a computer program such as QuickBooks. You could even use EXCEL software and create an online spreadsheet. The method in which you put down your budget does not really matter; however, it should be kept somewhere where it can be easily accessed. The first thing that should be imputed is fixed amounts, such as rent and insurance payments. Changing utilities should be average, as should employee income amounts. These can vary, and they can be easily changed if need be. After all of your expenses and payments have been charted, begin adding and subtracting to find out if your business is staying within budget. If so, congratulations! If not, go down the list and find where you can make sacrifices to ensure that your business will stay above water.
If you are not mathematically sound, or are not comfortable tabulation large figures, consult a professional. A certified account will be able to help you with an annual budget, as well as other business related services, such as payroll and taxes. Be sure to consult other local business owners for their suggestions for a reliable certified accountant.
Let’s say your annual budget sets you having left over revenue at the end of the year. Do not spend it. Save it, or invest it, as sadly, not every year will be as successful. By saving or investing these funds, you may be able to help your business float on if the economy tanks again in the future.
By having an annual budget, you and your business are sure to flourish. An annual budget is not only good for keeping a watch on overhead money, but it also helps keep track of when business is slow. By seeing which months are slow, you can implement promotions to help garner business.
