Plain and Simple: Bright Business Insights Summer 2018 | Page 5

HOW TO MASTER THE BUDGETING PROCESS The Budget is Your Business’s Roadmap, Let it Guide You If you want to grow and maintain a healthy business, you need to know where you’re going to generate revenue and incur costs. That’s why developing a budget that aligns with the purpose and goals of your company is so critical — and such a challenge. To set yourself up for success, you have to ensure that the information you use to author your budget is current, comprehensive and goal- oriented. Yes, it can be a lengthy process, but there are some pointers you can use along the way to help ensure that your budget planning process is a fruitful one. Start With the End in Mind You can’t get to where you want to go if you don’t have a destination in mind. Starting with the end in mind will give you a basis for making decisions as you move forward in your budgeting process. Examine What Has Happened in the Past Look at your historical financial performance as well as the economic climate in which you are operating. Pull data from recent periods and utilize your findings as a starting point. It’s also a good idea to look at key performance indicators, which will help you get a handle on whether your business is relying on the right metrics and observing the right industry trends. Develop a Budgeting Model Once you’ve established a destination and reviewed your historical information, you’ll need to chart a course. As you develop your model, consider whether multiple budgets are required for multiple scenarios. It’s also helpful to develop an outline for the process and determine guidelines that will allow everyone to adhere to the budget, track progress and ultimately execute your strategy to achieve your company’s financial goals. Your budget should be a living document, one that provides you with an accurate view of where you’ve been while showing you the path that will guide you to your next destination. Updating your budget throughout the year will also allow you to make adjustments in future months, further ensuring that you will arrive at your intended by: Jeff Semple Area President, FocusCFO 1010 Jackson Hole Dr. #202 Blacklick, OH 43004 330. 412.5872 [email protected] destination. Give me a call to learn more about building a better budgeting process for your business.