Many small businesses try to operate without a formal budget. Even some businesses that have a budget rarely consult it, meaning they are not gaining the business advantages that they could be through budgeting. For startup entrepreneurs, a budget is like a roadmap that can help them set goals and assess the validity of their business concept. For established small businesses, a budget can be used to take the pulse of the business, determining how the business is performing through the years, and helping identify possible future investments. By regularly consulting a budget, business leaders can compare actual figures and catch potential business shortfalls or other problems early. Budgets can also be instrumental in winning over investors, convincing banks your business is a good loan risk, or bringing on new partners or customers.
Building and maintaining strong control over business operations, has never been more important and more challenging. We offer solutions to create and support the complete Budgeting process, starting from advice on reorganization including accounting implementation up to establishing a complete financial control over data comparison.
Different types of budgets can be drafted to monitor various financial aspects of the business.
• Operational budget - An operational budget is the most common type of budget used. It forecasts and tries to pretty closely predict yearly revenue and expenses for a business. This budget can be updated with actual figures on a monthly basis and then you can revise your figures for the year, if needed.
• Cash flow budget - A cash flow budget details the amount of cash you collect and pay out. This is generally tallied on a monthly basis, but some businesses tabulate this weekly. In this budget, you track your sales and other receivables from income sources and contrast those against how much you pay to suppliers and in expenses. A positive cash flow is essential to grow your business.
• Capital budget - The capital budget helps you figure out how much money you need to put in place new equipment or procedures to launch new products or increase production or services. This budget estimates the value of capital purchases you need for your business to grow and increase revenues.