You only have to mention the word budget to some people and you can see their eyes glaze over, but if you run a small business it is a subject that always needs to be a topic of conversation if you are going to keep on top of your finances.
Here is a look at ways to control and track your business spending, including an overview of why budgeting is so important, some tips on making it easier to gather expenses data, and how to make the most of that information.
Enough money to survive and prosper
If you are going to keep good control of your business and drive it forward you need to find a way of estimating and matching your expenses to your revenue so that you know if you have enough cash coming in to cover all of your bills and pay the wages.
What you don’t want to do is discover that your finances are in a hole at the point when you actually run out of cash. This is why budgeting is so important, as it allows you to budget and plan so that you don’t find yourself in an unexpected tight corner with your finances.
Without a cohesive strategy for monitoring your expenses and income, you will be running a risk that you could run out of cash at some point and you won’t put yourself in a good position to compete and grow the business either.
Keeping track of your expenses
You don’t want to spend all of your time fretting over a budget when you have plenty of other things to do, but you also need to find some efficient ways of keeping track of your expenses so that you can collate all of your information quickly in order to be able to produce a budget.
One option to consider when it comes to tracking all of your expenses is to use a business credit card, plus additional cards for your employees.
Using business cards will allow you to see all of your spending on fuel and other related expenses in one place, saving you time on adding everything together for your budget figures. It can also help cash flow as you get a period of time between spending on the card and when you have to pay the balance off in full when the statement comes in.
Review your performance
Aside from the obvious need to have a clear picture of where you are with your cash coming in and going out at any one time, creating a budget allows you to do a lot more besides.
It gives you the opportunity to review how your business is performing and how profitable it is. You also have the chance to review and plan how certain changes will affect your business, such as planning to buy some new equipment and seeing how that will impact on overheads and future sales.
If you work at creating a comprehensive budget for your business and use options like business credit cards to track your expenses, you will improve your odds of staying in control and planning for a brighter future.
John Pearce works as an independent business consultant and likes to believe that he plays an invaluable role in his client’s business growth. He writes about all manner of business topics for an online audience.
Kidal Delonix is a contributor to Mr. Hoffman's blog. The views and opinions are entirely his/her own and may not reflect Mr Hoffman's views.
Learn more
Nowadays, fleet cards are one of the most essential means of businesses of any size. These cards are restricted to lubricants, fuel, and oil p ...
As a business owner, you are likely well aware of the fact that running a successful business can be one heck of a challenge. From coordinating ma ...
As a business owner, you know that running your business takes commitment and attention to details in planning, marketing, and financing. It's imp ...
Running a small business is no easy task. Even if you just have a one-person operation, it’s easy to let expenses get out of hand. To a certain de ...
Thinking of expanding your business? Introducing a new product line? Or maybe you're just trying to add some cushion to your cash flow? Whatever r ...
