Talking about budgets is certainly not anyone’s favourite topic, and putting one together never seems to be at the top of the ‘to do’list. They are perceived to be complicated and boring, and many people simply get overwhelmed by the whole task.Talking about budgets is certainly not anyone’s favourite topic, and putting one together never seems to be at the top of the ‘to do’list. They are perceived to be complicated and boring, and many people simply get overwhelmed by the whole task.
But, when you don’t have a clearly visible budget that encompasses all of your profit and loss, it takes a lot of guesswork to know what’s coming in and going out. You won’t know how much money you can reinvest in the business, how many sales you need to cover your fixed costs like rent, electricity and salaries, and if you can afford to hire extra staff in those busy periods.
Creating a monthly budget for your business using Xero will take some time and effort to begin with, but by following the steps outlined below you can make the process as seamless as possible. Once you have the budget in place and tweak it as needed, you’ll be able to have a clearer picture ofwhat the real financial state of your company isand improve your business performance
If you are reviewing your budget every month, you can see exactly where the money is going and make any adjustments that need to be made. The key thing to remember is that once you set your budget, it will need constant tweaking to ensure that you are matching seasonal fluctuations, promotions, and new product launches. It can be daunting when you see that the amount of money coming in is less than what is going out, but this is quite often normal for new businesses.
As long as you have your fixed costs taken care of, then you can see what profits you have that can be reinvested back into the business. Only when you have an honest budget will you be able to work towards achieving your financial goals.
Every entrepreneur knows to build a business that works without you – a business that…