Tips on Budgeting for the New Year in 2016 from Small Business Accountant Sydney Part 2
Last week, we looked at how you can create a budget for your small business to help stay on top of your income and expenses. Here are a few ideas on how to have a well-crafted budget and to achieve your goals in 2016, from us the small busines accounting in Sydney.
1. Motivate employees:
Business budgets should be readily available to all staff and owners of the business. A budget is useless if only the business owner knows about it and does not share the future direction and goals of the business with the people most likely to affect the outcome, its staff. Having the staff also play a role in setting the budget for the year can and will motivate them to want to see budget parameters met. Of course, doing so will mean providing incentives for staff to want to meet the budget in either financial or non-financial ways, only you will know what rewards will work best in motivating your staff. Of course, this won’t be an issue for you because you've already factored these outlays into your budget on the assumption that the budget is met. If the budget is not met, then the expenses become irrelevant.
2. Promote periodic internal reviews:
Having a budget promotes and encourages the small business owner to conduct regular reviews of the business. This can cover staff appraisal reviews, regular meetings with key suppliers to discuss pricing meeting with current customers to see where you can value add to the services you already provide. As well as this, it allows you to make sure all departments are on track to meet the budget goals, and if they aren’t to make fluid changes as needed to keep everyone on track for the end goals.
3. Cash flow:
Often small business owners, especially solo business owners, fail to budget for large one off expenses, whether they be equipment purchases, taxation obligations or simply regular annual bills that only crop up once every twelve months. By factoring such one off issues into your annual budget and your business accounting, you are sure to have the necessary cash flow to cover these events, without putting unnecessary strain on the businesses resources.
Whilst putting together such a comprehensive business budget can drain your businesses resources in the short term, the long term benefits will more than outweigh the short term pain of setting aside the necessary time required to take this process seriously. For the business owners who are not well versed or experienced in preparing budgets, all we can do is recommend that you don't try and fly blind on this one. Speak to your small business accountant in Sydney or business consultant for advice on how to get started. Not only will they assist you in preparing the actual budget, it will create a great talking point for regular business reviews. Just remember that a budget should be a fluid document, and making changes to the budget is fine as long as you still end up where you want to be. Remember, don't fail to plan, otherwise you are almost certainly destined to plan to fail.