Episode Transcript
[00:00:00] Hello, and welcome to another episode of Financial S Nickens, your bite-sized information for entrepreneurs. I'm your host, Alisa McCabe, and today we are going to be talking about budgeting finances for your business. It's a great time of year to review your budget. Don't feel bad if you didn't make your budget or something's wrong with your budget.
Budgets are not set in stone. It's something that you are going to revisit often. I can't tell you how many times we talk with clients, and at this point during the year, we may have to redo their budgets for whatever reason, economic slowdown, um, it, they won a contract, they weren't expecting to win. So it's all these things that happen that you can't predict.
But a budget is a good thing to do because it actually provides you a roadmap. And so you can revisit it now. And it is really an effective [00:01:00] tool when you use it correctly. So one of the most important aspects of budgeting is tracking your income and expenses, and this gives you a clear picture of where your money's going, where it's coming in from, and it actually helps you to allocate your resources.
So if you have more sales coming in, you may actually need to hire, and that will tell you that from your budget. So there are so many different ways. To track your finances for a budget, and the easiest way to do it is in a spreadsheet. You can also have this done in QuickBooks Online. Plus it is really, really easy to do it in there, and it actually will populate actuals versus budgeted, which is a phenomenal report.
So it gives you an idea of where you are at at any time during the year. So one of the things that we do tell our clients is to be realistic about your ideas. [00:02:00] So if right now your sales are at a million dollars and you think by the end of the year they're gonna be 2 million, now is that realistic?
You're halfway through the year. What happened? What changes? Maybe you did win a contract or you have one in the pipeline and you know that it's going to happen. Great. Okay. Let's set up all the income and the costs associated with it so that you can figure that out. Now, if you haven't listened to my podcast about direct and indirect costs, head over to Financial Snickens.
Look up in Direct and indirect cost podcast and have a listen. It talks about how to figure those things out. And again, if you wanna chat head over to my website and we can talk more about that. So you really need to get a realistic idea of what your income and expenses are gonna be and review it regularly.
So, and make these adjustments as you need, as a rule of thumb. As a rule of thumb, you [00:03:00] tend to spend more than you expect. So if you're starting from scratch on a budget, and you know what, if you haven't even done a budget yet for this year and you wanna start now, go for it. The best time to start a budget is today.
So if you haven't done it, don't worry about it. Start one now. Um, and, and it, so setting up your expenses and you start to think about how much am I going to spend? You're not sure. You don't have any numbers to go by. Take a number and then add 10 or 20% to it because there are always unexpected things that come up.
And the worst case scenario, you end up with more profit than you expected, so automate your finances too. That will help you in predicting what's going to happen in the future. So set up automatic bill payments. Your phone bill is probably the same every month or very close. Set it up, put it on a credit card.
You do not need to spend time paying the those things that are recurring. And also it helps you to get [00:04:00] an idea of how much those bills are. Take the time to set up a recurring transfer to your savings account. This will help you budget for money that you need for taxes at the end of the year for giving up bonuses at the end of the year.
Anything that you want to be able to have money for at a certain date and use a budgeting software. I know I said you can do it in Excel and you can if you are doing it on your own. But there are professionals out there that can help you set up your budgets in an accounting software. We are experts at doing budgeting and helping you set prices and understanding that forecasting that can happen.
Those are CFO services. It's really, if you don't understand it, you're not. It's not a bad thing, it's really people with years and years of experience who can do some really high level stuff. But for simple strategies, just start with the An Excel spreadsheet. So I have listed below [00:05:00] some helpful resources.
So there's, there's things that you can go online and get how to create a business budget. I have the link below 10 Excel budget templates that you can start. And if you have QuickBooks online and you wanna try it yourself, I've even given you the link how to set up a budget in QuickBooks Online. Don't be worried about doing it wrong, you just start it, get going with it.
And honestly, I'm right here to help. If you wanna create budgets and QuickBooks online or even just have a discussion about it. Head over to my website, first steps financial.com, and click on the Let's Chat button and we can talk about budgeting and how, how we can set up something that's easy for you to understand and that you can use as a really powerful tool to predict your year end.
Looking forward to talking to you. You can shoot me an email too at Alisa first steps financial.com and we can chat more [00:06:00] about budgets. Take care.
