The financial year is over…phew! You’ve probably enjoyed a few end of financial year drinks and are glad that all the end of financial year TV advertising is over. But now that we’re into the new financial year, if you manage a business budget, it’s time to take stock of how the last year panned out and prepare for the coming year.
Whether you’re a small business owner, or you manage the budget for a corporate department, being organised for the next financial year will help you make the most of the knowledge you’ve gained this year and allow you to prepare yourself within the budget you’ve been allocated.
Getting Budget Buy-in
If the term “budget” is more of an aspiration than reality for your business, then consider presenting some arguments for implementing a budget. Yes, it can be a costly and time-consuming activity (with the general feeling that preparation of future information is hard), but there are so many benefits. At the end of the process you’ll have a forecast of the expected business results. It’s not just about saying what can be spent and when, or checking staff performance; it’s a tool for planning, co-ordinating and controlling resource use. It ensures that your company’s day to day operations are directed towards its goals.
If you’re running a small business and need to convince yourself that setting a budget is necessary, or you need to convince your managers, take a look at these benefits:
Staying on Track
As we’ve pointed out, one of the benefits of having a budget is that you have a clear control tool. You have in writing your expected revenues, expenses and financial situation. A regular comparison of your budget and actual figures will force you to analyse what has happened and help you stay on track to meet your goals.
Avery IndexMaker Dividers are a great way to continue to keep yourself aligned with your budget and goals for the year. You can customise the title page and tabs, creating sections that make sense to your company or department. You might create a month-by-month analysis where you include data that supports any surplus or shortfall, or choose to segment by department and share a master file.
A successful budget process requires the ability to easily evaluate variances and take corrective action. It’s important that this information be easy to access and review, and keeping a well-organised master folder where the various stakeholders can locate data that is of use to them is a huge step in the right direction. You want to make it as easy as possible for data to be added and assessed. That’s your best chance of keeping on track to meet the business’ goals and objectives.