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Budgeting & Forecasting

Managing your business finances effectively is an essential for every business and budgeting and forecasting must be completed correctly. There are many benefits to using budgets and forecasts throughout your business and our accountants always offer a helping hand.
Roger Hatherall & Co can provide detailed financial reports to organise a budget and forecast that your business needs for the future. We can always support you to improve your financial management and performance.

Business Planning

Every business should be planning for the future, no matter what the current situation of your business is, you should be looking ahead. Planning for any possible risks and the expectations you want your business to achieve in the future will help you stay as organised as possible.

Creating a forecast to do this is the best option to include as much information as possible. A forecast will layout the targets and goals you want your business to achieve and how to stay on track of this to make it possible. If you are failing to achieve what was expected, having a plan will allow you to identify where problems occurred and how you can improve.

Reduce Costs

The point of budgeting is to stop your business spending more money than you actually have to. Although there may be no problem with your spending figures right now, if you continue to grow in the future, spending will only increase. Putting a limit on how much money every section of your business can actually spend will stop expenses getting out of control.

You may think budgeting is not needed, especially if your business is currently flourishing, but using a budget now will help you with all your long-term goals. Although treating staff members and improving your business should be done regularly, trying to budget so that you never spend more than necessary could help save money. You will also be left with more money to continue the growth of your business.

Without an effective budget, you could struggle to achieve your targets and expand your profit margin, with unnecessary costs leaving you a smaller profit.

Flexibility

The biggest benefit of creating a budget and forecasting is that there is plenty of flexibility to make changes to your plan. Nothing is set in stone and using a forecast to see where you are and where you expect to be will help you make positive changes to the business. Forecasts will identify where the problems were within your business and what you must do differently.

This could be improving your revenue or using a budget to reduce costs. Once a budget is created, this is also changeable. Although you should stick to your budget to reduce business costs, if you feel budgets need to be increased or further decreased, this should never be an issue. You are always in control of how much money you are spending and where this money is allocated.

Compare Business Performance

Forecasting your business should set an outline of what you want to achieve over the next month, year or any timescale. These targets should be hard to reach but also realistic for your business to achieve. Whilst forecasting will set out these targets and your plan, you should always make comparisons with what your business actually does. By bookkeeping effectively, you can always monitor the performance of what you actually do and what you set out to complete.

Making the comparison will help you find where problems occurred and what you must do differently to reach the goals you have set. If you choose to create forecasts but fail to compare and evaluate, you will see no improvement in your business or financial performance.