As a business owner, there are several important data points you have to keep track of. Concerns such as proper staffing, inventory management, location management, your online profile, and marketing to name a few. One aspect of your business that is critical for tracking is your budget.
Keeping track of expenses, earnings, and liquidity is highly important because it allows you not only to keep your business running at a positive but also to be prepared for unexpected expenses. Investing in good budgeting software can help keep these figures in order and help manage current and future expenses.
Items For Your Budget
When configuring your business budgeting software there are several variables you have to track to have a full picture of your business expenses. Expenses can occur daily, weekly, monthly, quarterly, or yearly depending on the charge; the same is true of earnings. Without proper tracking, your company can quickly find itself in financial trouble. Some of the pieces of your company budget should include:
- Your payroll should include everyone who takes some form of salary from owners to frontline workers.
- Any rental fees your business may have, as many businesses do not own their property outright. This can include office locations, stores, warehouses, and any other company locations that serve as a part of the business.
- Insurance policies are an important part of modern business and include liability insurance, unemployment insurance for your employees, and property insurance for your company’s stock and equipment.
- Utility costs such as internet, phone lines, company smartphone plans, water, electricity, and so on.
- Outside third-party expenses such as IT services, repair people, your cleaning team, and any outside accounting services are some common examples.
- Your marketing expenses should always be tracked and include advertising plans and any related expenses.
- Also, be sure to list any outstanding loans that are still being paid.
Benefits Of An Effective Budget
A well-managed budget offers many advantages for your business.
- Emergency Preparation:unplanned expenses can come up when running a business, just like in private life. When these things happen, you have to be prepared. A good budget can allow you to have savings that can be used to respond to unplanned occurrences.
- Set More Precise Goals: when properly budgeted, you can track how much you are spending on your sales department and set goals that correspond to how much you expect to receive in return for the expense. By knowing the exact figures, you avoid setting goals that are too low or too high.
- Measure How Well You Are Doing: with a budget, you can set concrete financial goals for the next quarter, the next year, or even multiple years. A business’s goal can vary you could be looking to expand into new markets, reduce company debt, or simply continue operations with no interruptions. With a budget, you know what the figures are and where things stand.
- Tax Preparation: having a budget makes tax preparation and filing far easier. If you do your taxes, you have the information you need to make an accurate report and if you make use of an outside accountant you have clear records to provide.
- Have The Resources To Make Big Choices: for a lot of companies, some choices are quite expensive and often unavoidable. It can be buying new equipment, giving your workers a raise, or opening new stores. These types of endeavors require you to have a strong budget and some degree of capital on hand to execute successfully.
A budget is the backbone of a well-run business and with good budget software, you can easily enter and update your information as needed and also create any reports to provide a clear picture of your company’s financial state.
