Disorganization, illogical budgets, and only one budget owner are just some of the issues that can impact your company’s finances.
Not everyone likes budgeting. Even the people who like budgeting don’t like budgeting mistakes. Budgeting mistakes are the ones that often bite the hardest because you may not catch them until late in the game, so best to be on the lookout for them now. here are five budgeting mistakes to watch out for.
1. Leaving out the revenue forecast
It’s not about how much you spend – if you don’t have the money to spend, it doesn’t matter if you budgeted for it. Revenue forecasts are the starting point for making sure you aren’t budgeting too much.
2. One budget owner
Yes, your financial person is the one who keeps the budget, but he or she is not the one doing the majority of the jobs the budget is spent on. If you want purposeful, effective budgeting, make your team leaders budget owners. They know what line items are unnecessary and which ones are crucial.
Make sure your accounting for every dollar and where it should be spent and where it actually was spent. Don’t leave gaps – it should be simple, but it’s one that often catches smaller departments as they grow big.
4. Illogical budgets
Your budget should show you how your investments in time and money will lead to growth. What money do you expect to make, and what money do you need to spend to make it?
5. Include time
Yes, money is what a budget is tracking, but knowing how much time you have available and how much time you spend is a very good factor in knowing whether you’re on budget – ahead or behind.
People think of budgeting as a restriction, but when done well, it will let your company make more money, which hopefully lets you do more things that increase your budgets.
One way to improve your budgeting setbacks and ensure forecasting and financials are on track is to use an integrated system that looks at all departments of your company holistically. Dynamics 365 Business Central offers the capabilities to monitor your business in real-time, base business decisions on current and historical data, gain business insights from artificial intelligence and run your business from one central system. To find out more contact allonline365 on firstname.lastname@example.org or +27 (21) 205 3650
Resource Credit | TechRepublic