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Budgeting tips for businesses

accountant37004762.jpgWhen it comes to running a successful business, one of the most important things you will do is create a good budget. To make money you need to spend money but you need to know just how much money you have before you can start spending away. A budget will provide you with a forecast of your revenue and the sales you anticipate. When you know how much money is coming in and going out of your business, you will have an easier time paying your bills on time so you can continue to strengthen your business credit rating.

Budgeting provides you with the knowledge you need before you go out and hire new employees or purchase new equipment. Here are some things a good budget needs to include:

  1. Realistic goals pertaining to your income

  2. Expense sheet

  3. Forecasting your spending amounts based on inventory ordering and other things

  4. Managing and controlling your expenses properly

  5. Avoid overspending which can lead to cash flow problems within your company

Budgeting tips for businesses starts with the person controlling your books. Do you have a good bookkeeper or financial control to your books? This person will keep each department on budget so you don't have overspending and other problems. Make sure you interview several people before you hire the person to be over your books. This person must have the education and experience you are looking for to properly manage your business books.

Purchase financial software. A big part of managing your books correctly is by purchasing financial software to use. This software should allow you to easily manage your books with tracking programs for each department and each expense. There are 3 main things you need to look for when you are searching for good financial software:

  1. Sale revenue

  2. Expenditures

  3. Profits

QuickBooks is a great program to use for small and large businesses. Using this program you can set username and passwords for the different department so they can go in and acquire their reports. The marketing department will use the program a lot to set inventory reorder points and the program will even send alerts when the stock is starting to get low.

In a manner of seconds you can generate sales numbers and other reports that will help the various departments and help you keep control over your books. The great thing about QuickBooks is that it is user friendly and very easy to use. QuickBooks will also generate invoices and deliver them electronically to some of your customers. This is another great option as it saves you from sending out paper invoices and waiting longer for your customers to pay you. You can also set online payments for your customers so you can get their payments as soon as possible.

A budgeting tip for small businesses is to always set projections for your expenses. If you aren't sure how much your expenses may be, always project higher so you have plenty of money in the budget to pay for them. Here are some of the expenses you need to project:

  • Utilities

  • Rent

  • Office supplies

  • Cost of raw goods

  • Equipment maintenance

  • Travel expenses

  • Advertising and marketing expenses

  • Tax payments

  • Loan repayment costs

  • Cost of goods sold

Watch out for expenses that tend to fluctuate like employee salaries, employee benefits, bonuses, reimbursements, and other things. To prevent problems for your business, try adding a cushion to your company. You need to have some cash reserves that you can fall back on when unexpected expenses arise.

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