A budget is the financial translation of the business strategy in which the investments, costs, revenues and cash flows are included. Budgeting can best be described as a company-wide planning process in which work is done on implementing the strategy and achieving the intended financial targets.
Although drawing up a plan is not very difficult, many companies have difficulty with realizing it. In this article, we have put 5 tips together to manage the budget of your company as well as possible, so that you too can achieve your financial business goals.
1. Provide a financial plan
In order to be able to stay within the budget with your company, it is necessary first to draw up a financial plan. This plan consists of five main parts:
i- The investment budget: all investments of your (starting) company are mapped out. Think of company cars or new computer equipment.
ii- The financing budget: the financing budget explains how the necessary investments from the investment plan are financed.
iii- The operating budget: the expected turnover and costs for the coming year. By working out an operating budget, you can see at a glance how many turnovers must be turned to play even or become profitable (and remain).
iv- The liquidity budget: an overview of how much money you receive and spend each month. Based on this component you can set different budgets: how much money can you spend on new projects and what is the maximum amount you can spend on the marketing activities?
v- The budget for private expenses: an overview of your private income.
2. Set up a responsible person
To manage the finances and budget, it is useful to appoint someone within the company as trustworthy. Reliant on the size of the company you can nominate several people. By placing the task of monitoring and managing the financial plan with one or more people, the chances are higher than the financial goals will be realized.
3. Plan interim evaluations
Have you appointed a watertight financial plan and a responsible person? Then plan different interim assessment, for example, once a month. By evaluating the management of the plan you can respond more quickly to financial problems and adjust the plan to the current situation if necessary.
4. Do not forget the annual evaluation
An annual evaluation is also essential for achieving the financial goals of the company. Evaluate the state of affairs and decide what you should or want to do differently in the coming year. The most crucial question is: have we stayed within budget and if not, how can we change this?
5. Turn on help when necessary
Managing the finances of your company can be very difficult, especially when your company is growing fast. Do you notice that managing the budget is not easy for you? Then think about turning to the help of a professional.
Get your cours finance today and good luck with managing the budget for your company!
