With certainty, there is one thing in business you can count on getting wrong – your budget projections. It’s almost impossible to get every sales figure and every expense line down to the penny. But tracking your budgets and projections can help you improve efficiency, see trouble areas, and make changes to increase the value of your company.
Consider your budget like a tool that is crucial to the financial health of your small business. Accurate budgets help you achieve goals, prioritize each area of your business, and plan for the future.
In order to more accurately determine this year’s budgetary needs, it’s crucial to track your expenses. Tracking expenses accomplishes more than keeping your books in order and making your taxes easier to file at the end of the year. By accurately tracking your expenses now, you will be able to project your budgetary needs for the future and meet your goals for the coming year.
Expense tracking should be the very first step you take in creating a business plan and a budget that is based on real expenses. You should engage in strategic spending by keeping accurate records (or tracking) everything you purchase throughout the year. Luckily, it is easy to keep track of your expenses for easy budget planning.
There are services available today like Shoeboxed that lets you scan receipts on the go, digitizing your data into searchable write-off categories. The mobile app also allows you to snap photos of business receipts with your phone and beam the information directly to your own account, keeping track of your expenses up to date in real time.
By establishing organized categories, it becomes easier to track where you’ve been overspending, where you can cut back, and where you can invest more in order to meet your targeted goals.
When tracking your budget from the previous year it should not only account for typical spending habits, but also challenge you to meet financial goals, increase your revenue, and decrease your spending in the coming year in areas that no longer serve you.
For more assistance on how to develop a budget for your business, check out our business budget blog series or contact us to find out how we can assist you in developing a budgetary system that allows your business to thrive.