If you want to significantly enhance your business performance in 2020 and beyond, you need to regularly compare your projected budget with actual results.
Too many business owners overlook this critical aspect of business budgeting, yet systematic and regular comparisons can provide highly valuable insights that can change the course of your business for the better.
Most business owners understand that budgeting is an important tool that enables business owners to control cash flow and manage expenditure. However, there’s one budgeting fundamental that’s too often missed – comparing your budget with your actual monthly results. This simple but valuable action can glean the data you need to make the most of opportunities or prompt you to act to avoid financial missteps.
In the past, time-consuming bookkeeping and tedious data entry were required to produce financial reports but today’s cloud-based, real-time accounting programs mean you can access meaningful financial information quickly and easily.
Monthly Reviews
We recommend you review your financial reports on a monthly basis as this allows you to become familiar with your benchmarks, which gives you the ability to immediately recognise an anomaly.
You also need to understand what any movements in the Balance Sheet are indicating.
Variations in your figures may signal the need to take action. This could include reining in a negative trend that may otherwise have remained hidden for months and potentially cause longer term business damage. At the same time, once you know why a positive change has occurred, you can use this understanding to develop good business strategy.
How We Help
We have worked with clients who have enjoyed profound improvements in their business performance by using this key budgeting strategy. And we can help you too.
Firstly, we’ll help you to use your accounting software more effectively so that you are able to capture the information you need. Then we’ll help you to analyse it – your revenue, expenditure, emerging trends and other matters – in meaningful ways that are specific to your business.
Monthly accounting is enormously powerful. It not only protects our clients’ businesses, it often determines their personal success too.
Your Next Step…
Please contact us if you would like to know more about budgeting and how to make the most of accounting software to capture meaningful financial information: phone 5438 8088 or email mail@corebusiness.com.au
At Core we specialise in business advice and SMSF strategies for growing and mature family-owned businesses and small and medium-sized enterprises (SMEs).
