manage business budget
Business

How to Manage Your Business Budget?

When we have a company under our responsibility, we are excited to be able to develop projects, develop products, and manage people and lead teams. But budget management, one of the most complicated administrative parts of the company, easily comes out of our control with any oversight or expense that was not in the plans.

Why control: Managing your company’s money in the right way guarantees the success of all your projects because in this way you find a balance between what you can invest in the development of new products and services, for example, and what needs to be separated for routine expenses. Remember that it is precisely the lack of financial control that leads many small companies to close the doors. Do not let this happen with your business. Start planning the budget right now!

How to get started: Although it seems difficult, controlling company expenses without affecting personnel is easier than you imagine. There are several management techniques and tools that will help you have money to apply for entrepreneurship and still have money for you, manager. See the four steps.

divide expenses

Step 1: Divide the purpose of the expenses

Collect an amount of company money and others for personal expenses. The idea is to have more than one bank account for that. In this way, you know what the limit of use of money is without compromising the finances of the company and vice versa. In the same way, the budget for each area of the company also needs to be different. It reflects how much it needs to be allocated to disclosure (Marketing), salaries, pro-labor, training and benefits (HR), in addition to operational, direct and non-operational expenses.

Step 2: Have to discipline and check accounts carefully

Write down everything that comes in and comes out of money. Separate a day to check all the expenses of your company. View and analyze all transactions, review expenses on a monthly basis to see if it goes beyond the account. If you are spending too much, you must cut some expenses so as not to compromise the development of the organization.

Step 3: Use a spreadsheet to budget

Despite looking tired writing each transaction on paper or on the computer that makes a difference to know if the money is, in fact, being applied in the right place. Some tools, such as a Full Financial Control spreadsheet can help analyze data and serve as great support for finances. Also for more help one can hire Audit Firm.

How:

Open a blank version of the spreadsheet and start simulating your expected expenses and revenues for each of the future months. After simulating every month, launching all the projected expenses and income go on the Consolidated Results tab and see the result of your planning, as in the example below.

Step 4: Reassess the budget

This is the key to success for your company’s finances. New demands always arise or the volume of work increases or decreases. It is important to always accompany the money that enters and leaves your company on a regular basis so as not to stay in trouble. Therefore, after completing the previous fill, save this worksheet so that you always have your detailed financial projection.

Next, open a new blank worksheet, copy the result shown in the DRE of the projection sheet and mount it in the Financial Planning tab Full Financial Control Worksheet.

Then, as you make the actual releases (not those previously projected) throughout the year, you will be able to accompany if you are hitting your income and expenses goals or not, thus making a comparison between what was planned at the beginning of the year and what it was done throughout the year.

When accompanying the budget by the spreadsheet, according to step 3, you can at the end of the month have graphs with an illustrated view of the real situation of that period.

Then, in any positive difference between what is planned and what has been done, you must rework the budget, so that it can accommodate the volume of expenses and what you intend to profit from the total amount. Over time, you begin to accumulate a true portrait of the company’s financial health.

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