Comprehensive and consistent budget reviews are vital for the ongoing success and profitability of your business. With the end of the financial year just around the corner, now is the time to revisit and revive your business’ yearly bookkeeping and budgets.
The end of the financial year is the perfect time to review how you budget has faired over the last year and to start thinking about where it needs to go in the future.
These few pointers are a guide to good budget practice, now and into the future. Remember, budgets are a framework for financial success, however, just as your business grows and changes, your budget should also adapt.
Evaluate the Numbers
Whether your business has been running for one year or ten, you will benefit from evaluating the past year’s numbers.
Essentially, you need to review the current budget to see if your actual spending and income is in line with the allocations and predictions made at the beginning.
Ideally, you will be doing a basic income and outgoing expenses evaluation monthly. This will help you track the current spending and income.
However, the purpose of a full yearly review is to identify whether;
- a) your predictions were realistic,
- b) whether you managed to stick to your budget overall for the year.
So, gather all your year’s numbers, and settle in with the calculator to see how the numbers have faired.
A major reason to comprehensively and consistently evaluate your budget is to identify trends in the numbers.
The beauty of numbers, especially with new user-friendly software, is their ability to tell a story. With consistent data, the numbers will help you identify patterns which will guide the coming years budget.
Budget data can help you identify seasonal trends, where business is booming or low stagnate. Reviewing the numbers, can help you identify areas that are consistently falling short, while others are in surplus. Identifying these seasonal trends, or area specific issues, will help you to reallocate money, time and energy in the most efficient way.
The primary purpose of evaluating your numbers and identifying trends is to help you learn from your mistakes and replicate your successes.
All good endeavours start with good goals. As a business owner, you’ll no doubt have the future of your business on your mind constantly.
So turn these thoughts into keys to your success. Take your ideas and dreams and turn them into tangible goals.
Then break them down into more manageable stepping stones.
Space your goals out over the next financial year and into the future. Remember that your budget is what is going to give these goals the means to come to fruition.
Remember, Rome wasn’t built in a day.
To help yourself and your team stay on track, be realistic with your goals. Make them achievable and measureable.
Set Accountability for Goal Achievement
For yourself, for your managers, and for your team members. Your businesses success is determined by the everyday actions of your whole team.
Being realistic about the ability to achieve the goals in the time you set will save frustration, stress, or worse disappointment.
Over Estimate Expenses
A budget basic for personal finances and businesses of all sizes. No matter what business you are in, unexpected events or setbacks happen.
Budgeting slightly above your anticipated spending will help you remain in the green and help keep your stress levels down.
Review Your Risks
Risks come in all shapes, sizes, some can be seen a mile off, while others jump out of nowhere.
In Public Relations crisis management, PR practitioners sit down and think about every worst case scenario that could possibly affect the business. Whether that be weather disasters, political decisions, stock market crises – literally everything. Then they have to figure out how to deal with the problem from a communication perspective.
While most of the problems will never occur, by simply thinking about its potential impact the PR team is already ahead of the problem.
As a business owner, you need to do this for your business.
For events such as wage changes, you will have a forewarning. For other events, you might need to be a little more hypothetical. In these cases, try looking at the history of your or another industry to help guide your management action plan.
It is a case of Prior Preparation Proves Performance – or rather Prior Preparation Prevents Performance Problems.
No matter what business you are in, effective planning and budgeting is your key to success. If it all seems a little overwhelming, our team of professional accountants and bookkeepers can help make sense of it all. MC Chartered Accountants Adelaide can help your every step of the way, from planning, to long-term financial management. Professional advise is only a phone call away.