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You can't control your company's finances if you do this to your budget

by , 07 October 2014
You know you need budgets so you can manage your company's finances. But do you know if they actually help you control your finances?

The truth is, if you don't do this one thing to your budgets, they just won't work.

So if you want your budgets to work and your business to succeed, read on and discover what this one thing is...

 

You must do this to your budgets if you want them to work effectively 

 
To have effective budgets, you must total all your relevant amounts. 
 
This sounds like an extremely obvious statement but you may be surprised at how many people think entering all their income and expenses is an effective budget. 
 
But this is a problem because you can't see how much your company spends and how much it has left over. 
 
Seeing the total amount you're working with is critical for controlling your finances.
 
Here's what you must do to easily total all of your income and expenses in your budget.
 
*********** Product endorsement  ************
 
Your accounting records are your business's Holy Grail!
 
Without them, your business can't continue to run. Management won't be able to make informed decisions regarding the future of the business if details about the company's past aren't available.
 
You must back up your records and make sure they're kept securely. Chapter A01 of the Practical Accountancy Loose Leaf will show you:
What are accounting records?
What do accounting records generally consist of?
Why it's important for you to keep accounting records
 
 
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It's easy to total all your budget amounts

 
You don't have to sit with a calculator and enter each amount and add them together to get your totals. 
 
In fact, if you use Excel to do your budgets, it can take you less than five seconds to work out your totals.
 
Let's take your income amounts for example. If they're in cells B2 to B30 on your Excel spreadsheet then enter in this formula: =sum(B2:B30) to instantly total all the amounts in the cells from B2 to B30. Then repeat the formula but change the cells to match the ones your expenses are in to total all your spending.
 
Doing this will enable you to quickly work out all the exact amounts in your budget so you can control your company's finances effectively. 
 
PS. Here's an amazingly simple way to manage your finances, with the Master Budget Series.
 

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