Why your business should be budgeting and planning its finances?

Ok so you run a business and some month’s cash is a bit tight. Sound familiar? You might need to look at better budgeting and planning.

What’s a budget?

A reasonable estimate of your sales, costs, profit and cash over a specific future time period.

Why do you need to budget?

  • It will allow you keep a close eye on your sales, costs and probably most importantly, your cash.
  • Knowing what expenses will be due in the coming months will allow you to make sure you have sufficient funds to cover them.
  • It will give you the chance to fully analyse your costs and make changes where necessary.
  • You will be able to track your forecasted sales over a period of time. This will then allow you to see when you will have peaks and troughs in demand and as such you will be able to manage them accordingly.
  • Give you a realistic expectation of profits or losses. If you are forecasting losses you will be able to assess the sales and costs figures and make adjustments accordingly.

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If you know you should be doing robust forecasting but you don’t know where to start then speak to Sharron. She can help you understand your business better and work with you to forecast accurately.

Drop Sharron an email on: sharron@westwoodaccountancy.com

Or give her a call on: 01207 509871