Plain and Simple: Bright Business Insights Winter 2018 | Page 7

PLAN YOUR WORK, THEN WORK YOUR PLAN How Budgets Can Positively Impact Your Business Have you ever gotten to the end of the year, saw the results, and wondered “I thought we had a better year than that. Where did all the money go?” If so, it’s a good bet that you probably didn’t use a budget and most likely could have benefited greatly if you had. 3. A budget will foster accountability and transparency. Having the ability to successfully set and manage expectations can be one of the most useful skills in business and having a budget allows you to do just that. Employees responsible for sales will Financial expert Dave Ramsey refers to a budget as something that know who their targets are and those who manage expenses will tells your money where to go so you’re not left wondering where it know what they have to work with. Furthermore, when developing went. While he tends to say that in reference to personal finance, the the budget, seek key employees’ input and promote their ownership relevance to business is undeniable. of it. Once the period is over, there will be no question where the 3 Reasons Why You Should Have A Budget For Your Business company’s success came from and where there might be room for improvement. The use of a budget has many benefits in the world of business. Some Now that I’ve let you in on a few benefits of budgeting, I can already of them are more prominent and universal than others, but here are a hear the words about to come out of your mouth … “but I just don’t few I’ve had the privilege of witnessing first hand. have the time!” While there is no denying that the development, 1. It will help you understand the “money” part of your business. It’s impossible to develop a budget without first understanding what is going on in your business. Whether or not you have a thorough understanding of your business’s finances, the reality is maintenance and review of a budget takes time, the alternative of not using one could have costs that are much greater. Virtually any statistic related to being successful will show that the likelihood of achieving a goal, whether in life or in business, is much greater if you have a plan. After all, failing to plan is planning to fail. that there is probably more that could be uncovered. Do you really If you have more questions about the benefits or process of budgeting, know what it costs to make that product or provide that service? or you would like to start using one but don’t know where to start, give Do you really know who your largest customer is and which ones me a call. I would be happy to discuss and help you learn more. have the greatest potential for growth? The process of developing, maintaining, using and reviewing a budget can help you understand the answers to those key questions. 2. A budget will enable better cash management. I had a professor in college who would constantly say, “cash is king.” After seeing and studying the way cash had an impact on a company’s ability to survive (and potentially thrive) during the recession and come out strong, I have to agree. If cash really is king, however, why not have a detailed plan in place for its source and its purpose? Whether it’s paying your suppliers or paying your employees, you want to be sure you have an adequate source of cash on hand. A good budget will be able to tell you not only how much cash you need, but when you will need it. by: Andrew Geiser, CPA Senior Accountant 212 North Washington St. Millersburg, OH 44654 [phone] [email protected]