Building and sticking to a budget is a key component in driving your organisations financial future and can influence (if not make or break) your overall operations.
Creating an effective budget isn’t as simple as waving a magic wand.. Nevertheless, with our help, creating a budget can be simplified.
Here are our tips to building a budget for your organisation.
Understand the what’s and why’s of having a budget.
You don’t need to manage every single penny; it is impractical to assume you can.
However, it is a guide to assist you in making better financial decisions and it can also highlight any areas that need improvement in your spending. Therefore, having full scope will provide you assurance and forward-thinking measures to manage your money.
Know your Organisation.
Of course, you already know your organisation, but do have you fully comprehend the ramifications to your originations if the cash flow and daily operations aren’t tracked accordingly? Is your cashflow seasonal in nature? Does your budget need to be a quarterly or monthly approach? Are you prepared for the low points? Have you been able to identify any threats and risks to plan accordingly? This accumulating wealth of knowledge can play a valuable role when the expected-unexpected happens.
Know your Team.
It’s important to build the right team to create your budget. Sometimes it helps to think outside the box and consult your whole team rather than leaving it to one person.
Everyone needs to be on board when it comes to reporting and planning. You want to ensure your staff are educated enough to be able to identity varying patterns of market behaviour, to offer insights, to step in when they start to pick up on anomalies and abnormalities.
Be Realistic.
While it’s all about planning ahead, remember that your budget should be based off past performance and spending while taking into consideration the risks you identified in step 2.
Know the costs that are:
- Fixed
- Inevitable
- Changeable
Always be prepared for change and consider it an opportunity to perform a health check on current operations. Be ready to turn on a dime. But also, be ready to stay put and observe.
Find this useful?
At Hopscotch Accounting, educating our clients on their budgetary needs is paramount to their success and ours. Our team is not only alive to the issues and challenges of a budget, but how time consuming and overly administrative it can be!
If your time is better spent on your organisation, you can leave the rest to us.
Contact Hopscotch today at 1300 HOP 123.
