Thursday, October 13, 2011

Budgeting Monthly

Most small businesses,that budget,do not consider the seasonal aspect of their business and the importance of budgeting monthly.  Almost every business is seasonable, whether you sell apples or sell widgets and  budgeting monthly is very important. So budgeting monthly is very important. Some quick tips to obtain the information to address the seasonality issue  and to budgeting monthly is to use the same cash flows as last years or the average last five years(if you have them) and choosing the most relevant measurement base. Just go to last year's bank statement and you can find the cash flows then you will be able to budgeting monthly.  While the other option is to sit down and brainstorm as to the timing by month of cash flows either by yourself or with a CPA. To budgeting monthly,either use a spreadsheet,or an accounting program like QuickBooks or your existing accounting software. If your accounting software does not offer budgeting, its time for you to realize that you graduated and need to upgrade software that offers budgeting by month.If you have any questions, do not take any chances with projections of your business , ask your CPA. Don't forget to budget by department. Its even better to find software that budgets a balance sheet and statement of cash flows by month. Software to budgeting monthly may cost a little more, but is well worth it. Nevertheless, QuickBooks and I am sure many other comparable(under $200) and similar priced accounting software will offer this monthly budgeting option. I hope you understand how important this feature to budget monthly or project monthly for next year or the succeeding years.

Sandor Lenner, CPA, MBA

1 comment:

CPA Washington DC said...

Yes, i agree that many businesses gets failed due to the poor planning of budget for their business as how to deal with business when the season will come during the month. Software is a lot helpful in this sense as an accountant may mistake somewhere to set the monthly budget.