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Piece of advice on budgeting from your Melbourne small business accountant

Budgeting is essential for small business owners.

Why? It helps to determine if you have the resources to operate, expand and grow in the forthcoming year.

Here are some advices from us:

If you are a first-timer or newbie to budgeting, our advice is to understand the industry or similar businesses to yours. No two businesses are exactly the same but there are similarities that you can make use to better budget. There are heaps of data online from reliable sources such as the government agency for almost every industry. You can even find percentage of different expenses like rent, marketing and bills etc.

When you prepare your budget, you should also look for ways to reduce costs. In that way, your profit will increase slightly. Look at your expenses and see how you can cut costs. For example, to save on utilities, use energy efficiency bulbs etc. Also, you can reduce interest on purchases by taking advantage of special repayment policies.

Shopping time! If you are planning to buy something major next year, start shopping now so that you know roughly how much it is going to cost you. Then you can use the figure to budget properly. That way, it gives you a clearer expectation. Try to analyse the trends of the cost – It is increasing or decreasing?

Budgeting is not about just guess some numbers then adding and subtracting. It is skilled guessing that will serves as a guide through spending decisions.

 
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