Businesses need a budget. The size of the business is irrelevant to the determination of the need for a budget. It is expected that as a small business owner, your cash flow keeps you awake in the middle of the night, that’s what happens to every other small business owner. What many fail to understand is that budgeting using online accounting software can ease their burden. It’s not just about small business owners; many businesses don’t have a budget in place. Don’t look at your size or the age of your business, just put a plan in place using free bookkeeping software.
Helpful mybooks Features to Make Financial Budgeting & Planning
At myBooks, we’ve highlighted essential accounts for small businesses to put up a financial plan and budget using online accounting software for small businesses;
A Profit and Loss Report
This is where you should start your budgeting as a small business. To know whether you are making money or running at a loss, you need to put together a Profit and Loss report.
Through your Profit and Loss report, you can ascertain your recurring and expected income. Look into the recurring and sundry costs of your business also. Other areas include; depreciation, payroll, debt repayment, and overhead expenses.
For instance, if you make a profit, you can decide to offset your debts, expand the business or keep cash in reserve. Putting a budget in place will make you know the right things to do when it’s either profits or losses.
A Balance Sheet
Your budgeting plans must also involve a balance sheet through cloud accounting software. You need to know how much your business is worth, what you own and what needs to be paid. You don’t need an accountant to compute the balance sheet, myBooks online accounting software will help you compute a balance sheet. Every one of your assets and the cash you have at the bank will be captured. This will help you plan ahead with the knowledge of your business position.
A Trial Balance
Often overlooked, the trial balance is a vital accounting book. In one single document, you’ll have your assets, liabilities, credits, and debits. Just think of it as a single document of your business account.
With these documents in place, you are ready to budget and plan your business finances.
With a budget, you’ll be able to see the dark areas of your business as a budget serves as a light. A budget helps you to navigate yourself away from obstacles that are meant to come your way. There’s a lot a budget can do for your business;
- A financial budget will help you forecast what your cash flow will look like.
- With a budget in place, you won’t run out of money, let alone have issues paying creditors or your staff.
- With a budget, you’ll be in the know as to where you can make savings or cut costs.
Essentially, every business must put in place a budget; it’s a requirement for success in the business as it ensures business continuity.