The Importance Of Budgeting In Business

A realistic and detailed budget is crucial for guiding your business to tackle unexpected challenges and to ensure you stay on track to grow.

It may seem obvious that business growth can only occur when there is money available for reinvestment but it is surprising how many businesses do not budget and do not track their performance against a budget.

A realistic and detailed budget is a very important tool for providing valuable information, guiding your business to tackle unexpected challenges and most importantly ensure you stay on track to grow.

Not having a budget could be like driving a car in the dark without lights on – how do you know where your business is going? A robust budget will help you identify the cash from operations you can generate, identify the capital you need to grow your business and consider any debt and income tax obligations you need to consider as your business moves forward.

Another way of thinking about your budget is as a way of measuring your business’ performance against expectations. That is, each month tracking actual revenue and expenses and comparing them to what you had budgeted.

For example, if your sales are lower than you had budgeted you have the opportunity to review and debate why and take corrective action immediately. Conversely, if you exceed your sales targets you can review the key reasons why and focus more energy in leveraging that knowledge in future periods.

If you are running your business without a budget, you may find you are actually wasting energy, being inefficient and not meeting your long-term goals. By taking the time to set a proper budget and manage that budget, you will give your business the best chance of achieving its full potential.

If you need any help with your budgeting process, contact you  Harris Black Team member today.

The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.

At Harris Black, we’re driven by a simple focus: we help; you achieve.

Click here to find out more about Harris Black’s approach and how they can help you achieve your financial goals.