Does Your Business Budget Need an Overhaul?

With interest rates rising and the cost of living increasing, many businesses have had to evaluate their finances. But even if you aren’t feeling the pinch, there is no better time than now to assess your business budget and give it a refresh for the 2022-2023 financial year.

Budget planning is a vital tool for the growth, sustainability and success of any business, and yes, even the world’s billionaire CEOs have budgets!

One reason many people do not put together a budget is that it seems too complex or makes them feel overwhelmed. Fortunately, we’re here to help design a proper budget for your business, which will make you feel confident and in control.

But what actually can a budget help with?

A budget does so much more than help you remain frugal with your dollars; it allows you to see gaps in your finances or explore opportunities for investment that you may not have thought possible.

The best budget is one that is actually tangible. And by this, we mean on paper, not in your head. But not just any old paper; your expenses shouldn’t be scribbled on a notebook. Instead, a proper full-scope budget that assesses your income and expenses while factoring in cashflow and your business goals is what makes up the full picture.

A business budget is important for 3 key reasons:

1. Most of your money is already spoken for long before you get it

Whether it be wages, rent, supplies, insurance, super etc., a majority of the money you ‘earn’ has already been committed to other sources in order to keep your business operating. A budget can take a deep dive into what is actually already spent and where you may be able to adjust or shift where your money is going before actually counting what’s in your pocket.

2. Money is spread all over the place

Some of your money is in the bank and in your wallet, while some of it may be in trust or invested. Some may even be with your partner or children if you have them. For this reason, you need a simple system that allows you to know where your money is and when and to make clear distinctions between what belongs to the business and what can be used for personal expenses.

3. Attitude

Successful entrepreneurs never got anywhere by being negative, which is why a good attitude in all aspects of your business is vital. With a business budget, you’ll be more across your business. If you think of it as a penny-pinching sacrifice instead of a means of achieving your financial goals and dreams, how long are you likely to stick with it?

Think about the difference between going on a diet and eating healthy. One is negative and restrictive; the other is positive and allows you to indulge every now and then while still achieving your goals.

A budget is part of a lifestyle, not a short-term fix.

Let’s face it. Money is a tool that enables you to reach your goals in life. But the cold hard reality is that, until you know where your money goes, you cannot make conscious decisions about how to use this tool effectively, and you may be caught off guard if something changes suddenly.

A spending plan for your business shows you exactly where your money goes and provides a clear outline of where your money goes and when so you can be on the path to financial freedom and security.

We understand that generic, cookie-cutter budgets are not worth the piece of paper they’re on, so we take the time to tailor a solution for you. Our business accountants will help assess your finances, design a budget that suits your business and keeps your goals in mind and, most importantly, is easy to stick to!

Give us a call on 03 5134 1778 and discover how PCR Accounting & Advisory can get you on track towards achieving your financial goals with a business budget.