To get the most out of a budget, you need to put some time into it. You need to structure it well and create it in an organised way.
The problem with this is you don't always have the time to figure out the process and then implement it.
To help, we've taken care of that first step for you. Here's the 13 step process you must use to create a successful company budget.
How to improve cash flow, analyse your financial statements and eliminate fraud in your company…
Step-by-step: Use these 13 steps to prepare your company budget
Step #1: You must establish and communicate the details of your budget policy in your budget preparation;
Step #2: Get the opinions of everyone the budget affects or who can give valid input on the budget plans;
Step #3: Decide on sales and production amounts for the budget period;
Step #4: Decide on your products' or services' selling prices;
Step #5: Establish what your expected costs are for your most important inputs;
Step #6: Select an appropriate inflation rate, if any, for the remaining costs;
Step #7: Provide the relevant elements of this information to anyone involved in the budget process so you don't keep anyone in the dark;
Step #8: See if your outputs are limited;
Step #9: Prepare your sales budget. Your sales budget is the key to the entire budgeting process. It drives your production and most of your expenses and, ultimately, your profit. Draft it as best you can before you move onto the last four steps.
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Here are the last four steps of your company budget process
Step #10: Prepare the subsidiary budgets;
Step #11: Get all the people who have to implement the budgets to agree and give you their buy-in;
Step #12: Put all the separate budget pieces together and you'll have a budgeted income statement, a budgeted balance sheet and a budgeted cash flow statement.
Remember: You must ask yourself if these budgets meet your requirements and those of the owners of the company or the investors.
Step #13: Final acceptance. If you operate as a company, you must get board approval for the budget too.
With these 13 steps, you'll have a foolproof budget in half the time it usually takes you to prepare one.