FINANCIAL BUDGETING FOR YOUR SMALL BUSINESS
Rosette Mugidde once said, ‘Budgeting is not just for people who do not have enough money. It is for everyone who wants to ensure that their money is enough.
As this is an era where small businesses are progressively being made, it is important to understand the Concept of Financial Budgeting for your business, no matter how small you may think it is.
A Financial budget is a plan for the coordination of resources and expenditures in a business. It helps in the control of the inflows and outflows of cash and the overall financial positioning of the business. Basically, it involves a setup that guides safe cash flow and in the long run, a smooth business. It is only wise and advisable to employ good budgeting skills and take advantage of these features.
A crippled budgeting will not only cripple the business but will eventually kill it.
That is why I have put together some methods to help you budget the finances of your small business.
METHODS TO BUDGET THE FINANCES OF YOUR SMALL BUSINESS
Various methods exist to budget the finances of your business, some of which are;
A spreadsheet is usually a sheet of paper that shows accounting or similar data in rows and columns. A spreadsheet is also a computer application program that simulates a physical spreadsheet by capturing, displaying, and manipulating data arranged in rows and columns. Spreadsheets are used to keep budgets but they can be tasking and time taking.
Using spreadsheets will require you to be settled and not get confused with the numbers. However, if you can’t keep up with spreadsheets, my other budgeting methods below can work for you.
2. Online accounting software:
As a small business owner, online accounting helps you track expenses and sales, thereby facilitating the running of your business. This software program also helps clients save their time and money and perform tasks such as data entry, audit and the likes.
3.Business accounting software
A similitude of the online accounting software, which includes various applications that record and process accounting transactions within various modules such as accounts payable, accounts transferable and the likes.
An example is MyBooks, a Quickbooks alternative, and which is a cloud-based online accounting software designed for small businesses with a friendly invoicing template and among other uses, helps to import your bank into the interface so you can interact with your bank conveniently.
4.SEND YOUR MONEY ERRANDS
It is important to know where your money is going into, and your money will only go wherever you send it. Maintain a Capital Expenditures budget, where you plan and set apart the amount needed to purchase any capital expenditure, for example, a processing machine that will stay over a long time. Also, a budgeted balance sheet and a cash budget will do.
5.The 60-20-20-10 METHOD
As a small business owner, it is possible that you have no employee to pay; this doesn’t imply that you swallow all the profits realized from the business at the end of each year. The 60-20-10-10 is a budgeting principle for your finances such that 60% goes to spending; 20% goes to savings; 10% goes to investing and 10% goes to donating to charity. Employing this principle is also a method to budget the finances of your business.
I know these tips helped you and I’m glad they did. Enjoy the finances of your business henceforth, as you budget them wisely.