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How to make your financial budget a BIG success

by , 08 August 2013
A financial budget is a useful tool that ensures you plan for the future, stay in control of costs and make better financial and business decisions. But, you can only achieve these gains if you know how to make your budget a success. Find out how you can do this efficiently.

It's no use having a financial budget that won't help you achieve your company's objectives.

But how do you ensure your financial budget is a success and actually gives you a snapshot of your business so you can measure the actual financial operation of your business against the forecast?

The Practical Accountancy Loose Leaf has the answer…

Compare your financial budget to this checklist to make sure you're on the right track!

Checklist #1: Is your company budget flexible enough to take advantage of new opportunities that arise?

If you hear yourself saying 'there's no budget for it', stop and think about the real goals of your business, for example, increased product diversity.

Checklist #2: Have you spoken in person to your staff about issues such as salary cuts, before you put it in the financial budget?

Think of your budget as the written instruction after you've communicated any news directly to your employees.

Checklist#3: Have the relevant teams given input on targets and agreed that their strategy's achievable?

Use your financial budget to coordinate the activities of the different departments.

Checklist #4: Are your goals realistic and clear?

Your staff will be motivated by the financial budget if they understand what's expected of them and if their goals are clearly set out in the financial budget.

For example, you'll motivate your personal assistant if you give her a financial budget for total costs within her control. She can control stationery costs and cleaning expenses, but she can't control how much her manager spends on lunch while he's on a business trip.

Checklist #5: Does your financial budget measure performance at the right level?

For instance, measure the divisional manager's performance at divisional level. This will keep your staff motivated and working towards end points.

Checklist #6: Do all your staff have a clear picture of their deliverables and budget?

Communicate and use your financial budget properly. Keep a close eye on how costs are allocated each week. At the end of each month, collect receipts and invoices so you can track the real costs of running each department. Make staff regularly compare actual costs to budgeted costs. This way your departments will all stay on track.

Now that you know the tools you need to make your financial budget a success, put them to good use so your company can achieve its objectives.

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