Five steps to create a budget for your business

How I hate budgets!

Each time an accountant told me to put together a budget for my company, my answer was - "When I have time I will!" I never seem to get just the weather.

For several years, when I started my company I never paid attention to a budget. I knew if I made money, looking for my budget and that was good enough for me. Also, whenever I tried to put together something I never compared my actual financial data to the budget numbers that I created.

Two years ago, I decided to take a different approach. I developed a forecast for a quarter of what I expected income and expenses to be. I came up with the data based on real numbers in the previous year. It 's been easy to watch last year and just add a percentage increase to the numbers. Then I took the time to review once a month, the prediction of where we were at that point.

With this system of creating a forecast and comparing that to the real financial status on a monthly basis are able to focus on the areas of income that fell behind and stop expenses that I need to do.

I am an avid fan of information products. I buy thousands of dollars every month. With the forecast in place, I found myself spending more time allocated to me and was able to cut back just a month later. The great thing about this system is that they are not locked into a certain amount every month, but still stay within the guidelines that you want to be in the first year or quarter finishes.

The best way to set this up is to use a financial program such as Quickbooks or Peachtree. Follow all income and expenses with the software. The next step is to print the budget that track what you did. Then take the numbers of your budgets and increasing income by the percentage that you want to increase revenue from. Then look at expenses and determine which categories will increase based on increased sales. This will become your financial projections.

The last step is to review its actual financial statement (income statement or statement) to the projections. Have systems in place to increase revenue and decrease expenses, if necessary .......