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MIDYEAR BUDGET CHECKUP
By Shelley Kessler , MBA Senior Manager , Business Advisory Group
It ’ s no doubt managing your budget can be a challenge with today ’ s unpredictable market conditions and continuous changes to legislation impacting businesses across the globe . With the midyear of 2022 quickly approaching , it ’ s a great to time perform a budget checkup to help evaluate how your business is performing and determine whether any adjustments should be made to ensure a successful year-end .
Consider these key budget areas when conducting a midyear review .
How are your year-to-date expenses and revenue aligning with your initial projections ?
Supply chain issues continue to be a primary pain point for many business owners , making managing expenses a challenge . Businesses have vendors who will currently not honor any price lists due to prices changing so quickly , leaving an unclear understanding as to how much supplies cost until they ’ re delivered to their facility .
A midyear budget review can help business owners gain a true understanding of how supply chain issues and associated costs have impacted the organization ’ s actual expenses and revenues . With this information , you ’ ll have a much better idea of what to expect in the coming months and develop the necessary action items to meet future projections .
What is your cash flow situation ?
Many businesses have been experiencing significant cash flow shortages due to cost fluctuations in supplies , and in some cases , slow-paying customers . Consider performing a cash flow analysis to help detect if there are any collection issues or whether you should revisit some of your vendor relations . Once you ’ ve reviewed key areas such as actual costs of your inventory or supplies , vendor payments and collections from customers , it will help you make the appropriate adjustments . A few cash-flow strategies to help shorten your cycle and free up some cash include negotiating contracts or payment terms with vendors , assessing inventory management processes , establishing a credit policy for customers , and having your team members stay on top of collections as well as implementing a system for cash management .
2 VIEWpoint Issue 1 | 2022