How to Keep Your Business on Track

You’ve done your research, you’ve drawn up a business plan, and you’re ready to take your small business idea and make it a reality. Congratulations! Now comes the hard part: making sure your business stays on track financially.

That’s where budgeting and forecasting come in. Budgeting is simply about breaking down your income statement into categories for monthly, quarterly or yearly stats – the choice is yours. A budget will allow you to compare your actual results against those planned so that you can see whether or not your business is on track to achieve its goals. An accountant will work closely with you but in a different way each time – it all depends on how many budgets you want to produce and at what intervals. They may even produce a cash-flow forecast for you, which is an estimate of when money will come in and out of your business over a period of time. This is useful information to have if you’re considering taking out a loan or investment.

Creating a Budget

The first step in creating a budget is to gather all of the financial information for your small business. This includes your income statements, balance sheets, and cash flow statements. Once you have all of this information, you can start categorising it into specific areas of expenditure, such as inventory, marketing, rent, salaries, etc. You can then start setting financial goals for your small business. Ask yourself questions such as:

• Do you want to increase sales by 10%?
• Reduce costs by 5%?

Whatever your goals may be, make sure they are specific, achievable, realistic, and time-bound.

Once you have set your financial goals, you can create a budget that will help you achieve them. To do this, simply establish how much money you need to allocate to each category of expenditure every month, quarter, or year. Remember to include a buffer for unexpected expenses!

Sticking to Your Budget

Now that you have created a budget, it’s important to stick to it as closely as possible. That means tracking your spending carefully and making adjustments where necessary. If you find that you are consistently overspending in one area, consider trimming back on costs or increasing prices accordingly. And if you find yourself with some extra cash one month, don’t be tempted to spend it – instead, save it for leaner times or invest it back into your business.

Working with an accountancy firm to achieve your goals

Budgeting and forecasting are crucial tools for any small business owner who wants to keep their business on track financially. By taking the time to create a budget and sticking to it diligently, you can ensure that your small business stays afloat, and you can manage the challenges that may come your way.

Working with you, our team of accountants in Oxted will prepare a budget for you creating the plan for what you want your business to achieve. Working with you in an advisory capacity managing your accounts, we continue to closely monitor your financial forecast to show how on track you are. We’ll then provide you with budgeting advice to reach your financial goal. We offer a range of accounting services including tax planning, payroll and bookkeeping.