An unrealistic budget can feel pretty useless to a small business owner. But when utilized properly, a bookkeeper or accountant can be your enterprise’s most valued player.
Accurate budgeting and planning takes a good amount of time and a fundamental understanding of what’s coming in and what’s going out of your business. If you don’t have an existing source of working capital or revolving credit, an unplanned expense or slower month becomes a much bigger problem. Take this quiz to find out if you’re on the right track with your company’s current budget.
You generally have room in your budget for small employee rewards, like a gift card or lunch out with the team.
Your annual projected budget report includes a few versions that consider different sales and expense levels to better prepare for missed estimates and/or unplanned purchases.
Each month, you check on your budget or variance analysis to make sure that your expenses and cash flow are in line with your business’s needs.
You generally know where you can cut down costs in a typical month to stay in line with your budget without having to make late payments or miss other important expenses.
I struggle to set a price for my products or services.
Low or inconsistent cash flow has affected my ability to pay bills and other expenses on time.
It’s difficult to predict what I can reasonably borrow since I don’t have a good idea of what my income will be for the near future.
I’m not afraid to pull the plug on a product or service that’s underperforming or isn’t worth the time investment for the profit I make.
I have room to support my employee training and development when it supports their core roles and responsibilities.
My budget is based on goals of where I want to be, and not based on predictions of how my business previously performed.
For more information and tips about small business budgeting, visit our resources and blog:
- How Do You Manage Costs While Expanding Your Small Business?
- Improve Your Business’s Accounting
- Develop Routines to Streamline Your Business