Business Budgeting Services and Advice

A business budget is a financial plan based on the company’s expected revenue and expenses over a set period. Financial budgets help businesses estimate spending, forecast revenue, and monitor financial performance. They also provide leadership with insights into how the company is performing.

By comparing actual financial performance to the budgeted figures, companies can assess their progress and make necessary adjustments to stay on track.

1. Revenue – This includes all income a business expects from selling its products and services.
2. Variable Costs – Costs that fluctuate with sales volume, such as raw materials and sales commissions.
3. Fixed Costs – Expenses that remain consistent, regardless of sales, like lease, utilities, and insurance.
4. Non-Cash Expenses – Expenses such as depreciation and stock write-offs that don’t involve actual cash outflows.
5. Non-Operating Expenses – Costs not directly tied to core business activities, like interest payments, losses on asset disposals, and currency exchange costs.

A business plan is a comprehensive document that outlines the company’s long-term goals, often covering 2-3 years. It’s commonly used for external purposes, such as securing financing from lenders.

A business budget, on the other hand, is typically short-term, covering a 12-month period, and is used internally to forecast income and manage expenses.

Zero-based budgeting (ZBB) is a technique where all expenses must be justified for each new period, starting from zero.

This approach requires businesses to evaluate and approve every expense, promoting efficient resource allocation and helping identify unnecessary costs.

1. Start with Your Target Budget: Define the total amount you plan to invest in your start-up.
2. List Essential Start-up Items and Costs: Identify all necessary expenses, such as equipment, inventory, marketing, and legal fees.
3. Determine Fixed Costs: Estimate ongoing expenses like rent, utilities, and salaries that will recur regardless of sales.
4. Estimate Variable Costs: Assess costs that will vary with sales volume, such as raw materials and production expenses.
5. Calculate Monthly Revenue: Project your expected sales based on market research and your business plan.

By combining this information, you can allocate your budget to various business activities, ensuring a balanced approach to spending and revenue generation. Remember to include a contingency fund for unexpected expenses.

An accountant can ensure your financial records are accurate and up-to-date, providing a solid foundation for budgeting. They offer expertise in tax planning and compliance, helping you navigate complex regulations.

Additionally, accountants can provide valuable insights and advice when making financial decisions, contributing to your business’s overall financial health.

If you’d like our help, simply get in touch and make an appointment to speak with one of our friendly team.