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Two tips to effectively manage your company's budget

by , 08 September 2014
Your company's finances take constant management and care. You have to ensure your company is growing financially for it to succeed at all.

To do this, you need to find a way to balance all your expenses and make sure your company makes a profit.

That's where having a solid budget comes in. It'll help you monitor your finances and plan your future growth.

To ensure your budget helps you do this effectively, use these two tips...


Use these two tips to make your company's budget is effective

Tip #1: Consider what growth you want to achieve in your company in the coming year
A budget should help you achieve certain financial goals. Therefore, you need to know what these are before you start drawing up your budget.
You must consider things such as:
- How much capital you want the company to have;
- Growth in your company's asset wealth;
- Growth in your number of employees; and
- Growth in your company's investments.
By clearly setting these goals out you can then create a plan to achieve them with your budget.
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How to save on auditors' fees and:
- Ensure your fixed asset register is prepared by the time your auditor arrives;
- Maintain your cash flow;
- Identify problem areas in your business; and
- Cost less than what an accountant charges for two hours of his work.

Tip #2: Prioritise your expenses and be realistic about them

Obviously expenses, such as your company's rent and your employees' salaries, are priority expenses. You have to budget for these first before you budget for that new office printer.
You need to be realistic about what you can and can't afford or you may end up pushing your expenses to the limit on things you don't really need.
When you create your budget always put your priority fixed expenses first, then your variable expenses and then see how much money you have left over for those additional expenses. 
By using these two tips you can manage your company's money effectively with your budgets.

PS. Here is an amazingly simple way to manage your financials, with the Master Budget Series

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