The new year is right around the corner, and now is a perfect time to get your business budget ready for January. Creating a budget will help you avoid going broke, but did you know that you can use it as a tool to increase profits?
To make a good budget for your business, you’ll need to take an in-depth look at your past year’s finances. This makes it easier to see where you can make adjustments to manpower and other variables.
So what’s the exact process involved in setting up a business budget? Here’s all you need to know about creating a budget for your business and using it to boost your profitability next year.
Things to Consider When Creating Next Year’s Budget
Buying software for small business accounting is one of the most important investments you can make in your company. It allows you to track receipts, incoming payments, and expenses. You should already have a good software program for your bookkeeping or written records that you can digitize.
If you decide to hire accounting services to help you with the budget-making process, you can give them your digitized records. This will simplify their job and help them produce results in a shorter amount of time.
In addition to using the right software to track your transactions, you should also know what your busy and slow times were like in the past year. And it’s also important to make note of any large purchases or one-time payments you made, and treat them as outliers.
How to Create a Business Budget
Accounting for small businesses can be straightforward, and your small business budget depends on three main things.
First, you’ll need to add up all income you made in the past year. Secondly, you’ll need to tally up all your expenses, including operating costs, equipment purchases, and rent. Lastly, you’ll subtract your expenses from your income, and the result will tell you whether you had a profitable year or not.
If you don’t make a profit, remember that it’s common for new start-ups to barely break even or sometimes have negative profit in their first few years. By doing this budget research you’re in a better position to correct any mistakes and increase your profits next year.
How We Can Help You Create and Stick to Your Budget
Creating a small business budget isn’t too complicated most of the time. But if you feel pressed for time or have an issue that needs special attention, don’t be afraid to hire professional accounting services.
Nolan Accounting is a prime example. We work with companies of all sizes and can assist with all your accounting, tax planning, and payroll needs. We do business consulting tailored to your needs, which allows you to free up your time to manage your core operations.
For more information, feel free to check out our website and blog articles. We’d love to speak with you and answer any questions you may have, so contact us today!