Every successful business needs a
budget.
The best way to achieve positive
cash flow is to manage your expenses and revenues to ensure
that you're spending less and taking in more money.
This is process is called budgeting.
In order to budget you have to set
spending limits and project revenues that wll be generated.
Budgeting
is a way to estimate your revenues and expenses for a
specific period of time.
Budgeting is normally done on
a monthly, quarterly and annual basis.
Budgeting
lets you implement financial discipline and hold employees
accountable for managing spending. It lets you see if
you're spending more money than you're taking in and if you
have enough money to fund operations and expand the
business.
Budgeting forces you to
examine the company's operations so that you could see
problems and take actions before they arise.
Every small business should have a budget.
What should be covered in a budget:
A budget simply list all of your projected Revenues and
Expenses and shows what your Net Income Before Taxes are
projected to be. At the end of the reporting period
you get to compare the Projected Revenues and Expenses to
the Actual Revenues and Expenses.
Revenues/Income:
Revenues comes from the products and services that you sell.
It is any source from which you are receiving an income.
Revenues are unique to each business.
Expenses:
Expenses are all
of the things that you will spend money on. Some
examples include, salary/wages, supplies, insurance,
utilities, rent, payroll taxes & cost, interest, etc.
Expenses are unique to each business.
The tools listed below are great resources for
establishing a budget for your small business. Also,
most
accounting software also have built in
tools that allow you to do budgeting for your small
business.
Item |
Description |
Cost |
QuickBooks Online Plus |
For $39.95 this application
lets you create budgets, manage your company's
finances, perform payroll management and much more.
It can be accessed and used from any device
(computers or mobile devices) and lets up to 5 users
access and use it. |
$39.95 per month |
Microsoft Excel |
Microsoft Excel has
budgeting templates that you can use for free.
If you already have Microsoft Office then you have
Excel with all of the free budgeting templates.
In Microsoft Excel go to File -->
New --> and select "Budgets"
under the "Office.com Templates section"
--> cick on "Business" and
select a budgeting template. |
Free |
|