Here at Butterworth Barlow, we often receive queries from small businesses across the North Westwho are seeking out our accountancy advice on budgeting for their small business. Whether you’re newly established or have been operating for a number of years, we’ve put together a list of our top tips to assist in the planning of your small business budget…
First things first, you should always keep a clear and organised record of every purchase you make. Many businesses make the mistake of only analysing their large expenditures, but it’s just as important to keep track of the less expensive ones. Although they may seem insignificant, small expenses quickly add up to large bills.
To keep on top of your cash flow, you should be sure to update your business budget regularly. Ideally, this could be looked at every month, being sure to include new projections and realistic spending categories. An accurate and genuine budget will help you to better distribute resources when you come to need them, and if you put some time aside to create a thorough budget, it will become much simpler to manage and make your business more efficient.
Planning ahead is important. Do what you can to anticipate and foresee any large expenses that your business may have to pay as far in advance as possible. Once you’re aware of them, you will be able to factor them into your budget each month, allowing you to save for them along the way. Many businesses fail to live up to their potential because they were unable to afford an expense due to poor planning.
It’s important to make sure you target any outstanding debts. Your debts will rapidly accumulate interest until you are able to pay them off so make doing so a priority. When you’re planning and creating your budget each month, you should look for any extra money that you can spare to put toward paying off outstanding debt. The quicker you can pay them off, the less money it will cost your business.
Finally, always overestimate your expenses. When you’re recording each purchase and expense your small business has made, it is much better to round up the numbers as it’s a lot easier to account for any underspending than overspending. If you do overspend in any given month, it helps to lessen the blow as you won’t have spent as much as it says on paper. To find out more about our budgeting services or for any further financial advice, please give us a call on 0151 493 9700.