Creating Your Annual Budget
What is a Budget?
A budget is a calculation plan that provides an individual or business with an overview of their financial situation over the span of a month or a year. However, budgets can also include the following:
Anticipated sales volumes and revenues
- Costs and expenses
- Cash flows
Businesses often use these budgets to create strategic plans regarding certain activities using measurable terms. It is also the first step that needs to be taken to set up this strategic plan, although many companies cannot always afford someone who can help them with this. It is used to set targets on revenue, to provide objective truths on your cost of sales and gross profits, and to achieve a reasonable reduction in overall costs. In turn, this helps to promote profitable and actionable plans.
By turning to Hills Business Solutions, you will be given the sound advice and expertise of a team that specialises in budgeting, strategy, as well as tax structuring. If you are unable to reach the strategy phase, then we can set out an actionable plan within your budgeting phase. To do this, we look at your history to see where you are going wrong, which we do by analysing your financial status before setting up a budget for you. We will then take you through this budget, making tweaks and adjustments along the way to help reach your desired outcome.
Soon after, we lay out our goals and objectives for your business laid out clearly, and then measure your budget against your financial status on a monthly basis. With this detailed budget, we are more easily able to take note of spikes that represent that the budget is not being followed. We will analyse this budget to set up a meeting to present you with the management accounts of your current financials versus your budgeted financials.
This will let us know if we need to adjust the budget, think of new objectives, and so on. This is why budgeting is so important, as it provides businesses with a legible roadmap to financial freedom.
What is our budgeting process?
Soon after, we work out a turnover plan that is reasonable. We will also look at past trends to observe if any peak seasons occur. Additionally, we also take a look at your cost of sales and work out a reasonable gross profit before looking at any possible cost reduction.
With all this, our aim is to monitor your business closely while you find your feet, adjusting the budget along the way if necessary.