Why should I budget?
- Help meet financial goals
- Helps with planning resources
- Helps with decision making
- Helps to meet objectives
- Increases staff motivation
How do I create a budget?
You can create a budget on excel or you can use a cloud software to produce the budget by just entering the figures you expect. This will then create a full budget which can be used for variance analysis.
Why does variance analysis help?
Comparing actual figures to budgeted figures helps to see how the business is performing and if the business needs to make any changes. For example:
- Increase the expenditure on advertising and marketing - the advertising cost is lower than budgeted and causing turnover to be lower than budgeted
How often should I re-visit my budget?
This depends on your company needs, you can re-visit and change your budget every month, every quarter or just every year.
If there is going to be a rise on the cost of your purchases, then it would be wise to adjust the budget so it is more accurate going forward, however if there is a one-off expense in a month that is of minimal value, it may not be worth changing the budget.
The next step
For more information, please contact Rebecca Kinsey on r.kinsey@uhy-mancheser.com, or your usual UHY adviser.
