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Input your projected revenue and line-by-line expenses for the next year, and we’ll show you how those numbers should break down month to month so you can track how you’re doing throughout the year.By staying on top of how you’re doing at the end of every month, you can make informed decisions about your business—like when you can invest in more resources or when you need to cut back—to get the most out of each dollar and get more insight out of your accounting software.You’re not going to be 100% on target, but that’s okay.
Your business will reap the benefits of budgeting if you update the budget monthly, using your expenses and income from the prior month as your guide, while also keeping in mind your firm's financial goals or targets for the year.
Additionally, work with your senior staff to see if they have information on upcoming issues that could impact the budgeted sales and expenses, either positively or negatively.
For example, if you have a retail business, you may realize you need to ramp up your advertising spending more in the fall to take advantage of the holiday shopping season.
Or if you've made changes that could have tax implications for your company, you may need to increase your budgeted accountant fees expense in anticipation of the extra accounting work required to work through the implications.
If your business is small, you may wonder why you need a budget.
After all, you most likely have a pretty good idea of your monthly cash flow and expenses.
The following worksheet lays out the income statement line items you can use to set up a basic business budget.
Depending on your particular business type, you may have to include additional types of income or expenses, but this worksheet should give you the general idea of the types of items you should include in your business budget.
For example, if you switch health insurance carriers to obtain lower-cost coverage, you can see how that change has affected your bottom line month over month, and year over year, as well.
A monthly business budget review can also help you spot potential problems.