by Andrew Lisa
You’re in business to make money. In its purest sense, that’s the concept of business. If you’re going to make money, you have to keep track of it, and you have to do it right. For a business owner, budgeting is as important as paying bills. Your budget is the framework on which your business will be built and the overlord of every decision you make including expansion, hiring, and ordering.
Follow these tips to make your business budget as reliable and accurate as it needs to be for you to succeed when starting a company.
Good, thorough budgeting can make or break a small business.
Get Software – the Right Software
Software makes the budgeting headache infinitely less painful. It will pay for itself in the form of mistakes you would have otherwise inevitably made. The first and best thing you can do is invest in good software that will do the heavy lifting for you. The trick is to get enough – and only enough – to suit your needs without paying for complicated features you’ll never use.
Here’s a glance at some of the best in three main categories.
For a quarter century, Excel has been the most ubiquitous business budgeting software in the world. This basic, entry-level software can handle rudimentary business needs with ease. For about $140, you can organize, schedule, and calculate both revenues and expenses. Track your spending habits and predict future budgets through easy, helpful charts and graphs.
More expensive yet more thorough, QuickBooks costs about $230 and can be used instead of or in addition to a basic program such as Excel. QuickBooks can help you enter receipts, handle invoicing, track tax expenditures, prepare financial statements, process orders, and manage inventory remotely or from your home computer.
Budgeting software on steroids, there’s nothing Alight can’t do. But it will only do it for about $4,000. It’s in league with packages like Microsoft GP and Sage MAS. The complicated, expensive program can handle importing and exporting, reduce time spent on profit and loss, and create balance sheets and cash-flow projections.
Get the right software to take the pain out of budgeting.
Use Common Sense
Getting the right software is key, but now you have to use common sense in budgeting. Pick a time frame for which to budget (quarterly, fiscal year, etc.) and stick with it. Revisit and update your budget monthly at the very least, preferably every other week.
Just as with your basic household budget, allow flexibility in your budget to provide elasticity to deal with things that will inevitably come up. Keep up with it. Every time you gain or lose a vendor or a supplier, enter the data. If you let it pile up, you’ll be much less likely to do it at all, leading to potentially costly mistakes.
For business owners, budgeting is tedious, time consuming, and absolutely necessary. Do it right with the right software and your finances will be in order. Let it lag or try to skimp on software and join the multitude of business owners who were on to something good, but failed to keep track of their money.