It’s always important to be budget conscious, but especially so for small businesses. Knowing how to properly budget can be crucial for them, as they often don’t have the fiscal experience and knowledge or deep pockets of larger organizations. But the participants of #QBOchat are here to help! In our latest chat, we discuss insights and tips that can help business owners with some of your budgeting questions and concerns.
What advice would you give for a business that’s never created a formal budget before?
First things first: What are you trying to accomplish and what are your goals? Before you ever start typing out budget numbers, you need a solid grasp of the vision you have for your company. Budgeting isn’t just about costs. Forecasting revenue is important, as well as planning for other cash in and outflows that don’t end up on an income statement. Additionally, budgeting can’t be done in a vacuum. It requires careful planning, collaboration, and agreement from your entire management team in order to be executed properly. You should never just jump right in to budgeting. Instead, we recommend researching how to get started with budgeting with informative (and reputable) articles and posts like this one from Inc., “How to Start a Business Budget.”
What are some important factors a business should consider when creating a budget?
Budgeting should never be done solely on a micro-level (your business only). Take into account industry and market trends and historical numbers. It’s vital to understand variable costs and how to effectively project those costs with changes in revenue. Additionally, rather than limiting projections to the upcoming fiscal year, consider keeping running projections. Investopedia produced a great article on this subject, “Six Steps to a Better Business Budget,” which delves a little deeper into budgeting for those who want to get their hands really dirty.
How can budgets impact the performance of my business?
If you’ve created a well thought out budget, you can better plan for the unknown. It can also serve as a planning roadmap of where your business may be headed as well providing insight to help you figure out paths get out of debt. Budgets can provide you with a clearer picture of reality and reveal waste or faulty assumptions, helping you to correct those issues before they lead to potentially sticky situations.
Are there apps or software that you’d recommend to help businesses like mine with the budgeting process?
Both the Desktop and Online versions of Quickbooks are an excellent place to get started for those looking to create a budget. In this software, you can run comparative financial statements to learn about trends and QuickBooksOnline has unlimited budgets and great reporting to help you once you’ve got your budget in place. Apps like BilBus, BodeTree, LivePlan and StratPad, found on the Intuit website, are some of the more efficient apps available to aid in the budgeting process. Additionally, the U.S. Small Business Administration has a wealth of resources, such this article, “How to Build and Use a Business Budget That’s Useful All Year Long.”
What are the key takeaways and tips for my business after I’ve developed my budget?
Creating your budget is merely the starting point. Revisit and re-evaluate your budget routinely to gauge the accuracy of previous assumptions and hold managers responsible by providing them the budget as opposed to just reports.
Want more insight into budgeting and other important business needs? Come back to QBOchat.com weekly at 3pm EST to participate in the newest discussion. Our conversation includes a wide array of participants, from small business users, accountants, developers and others. Check out our Archived Chats to view previous discussions. Got a suggestion for a future topic? Shoot us an email! We can’t wait to chat with you on Thursday!
Looking for the transcript from this tweetchat? Here you go!