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Budgeting & Forecasting

Small, Medium & Large Business Accounts

Corporate Account Management

Small, Medium Sized Accounts

Payroll

Investments, Partnerships

Growth

Taxation

The importance of Budgeting & Forecasting

Helping you understand your business..


Budgeting and forecasting are essential to set targets for income and expenditure and then hold yourself accountable to those targets as the year progresses. The most financially stable business has a budget and a forecast.

The main benefits are:

● Identify risk areas early enough to rectify issues before they are serious

● Plan and predict cash flows

● Take control of what’s coming in and due to go out of the business

● Separate out a sub-budget for growth with confidence in how much you can spend

● Manage your sales pipeline and track performance against targets

● Make more confident strategic decisions

● Show potential investors

Provide for lenders for funding.

Your finances should be set before the financial year begins and should be fixed for at least a quarter in anticipation of revising. Smaller businesses will revise the budget quarterly, and larger ones will oversee their annual budget fixed. The point of this is to give sales targets and limits for expenditure to keep you honest when spending money to develop the business.

Each month you should run a Budget Variance Report to publish the actual results against the targets and discuss takeaways from the numbers. For example, one sales stream may be doing well but another may demand more attention. It will support you to identify areas of under-performance or overspend and rectify the issues before they grow.

Forecasts are the same as the budget at the start of the year, but they are revised as things change. They flex and change throughout the year as your knowledge of the businesses position and pipeline changes. For example, imagine you win a big client, and then go and update the sales pipeline to show another £10k coming in each month for 12 months. You then update the cost associated with delivering that work (sub-contractors) and you now have an updated forecast. Your finances, however, will continue to be the same.

Business owners will struggle with creating simplified and easy templates to maintain, as well as establishing a quota in the first place. We have also found that while we all have the most honourable of intentions, a monthly review of the budget variance report and revising the forecast do not happen often enough.

Businesses frequently support multiple systems for sales pipeline, expenses, accounting, forecasting and budgeting and none are talking to each other. Spending money on growth is careless, as businesses often cannot easily predict cash flow over the next few months or years.

This is where we can help! We take this inconvenience off your hands and help you produce a budget, provide you with a template for your forecast and set up, run and report on the results. This can even be run within your accounting software, once you have loaded your budget into the budget manager.



Helping You To Keep Track Of Your Finances…

How to find us

Registered Office:

Akber & Co Accountants

451 Moseley Road

Birmingham

B12 9BX




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