Year-End Is Business Budget Time

Although the need for a business budget may seem obvious, many companies overlook this critical business planning tool. Therefore, a brief reminder may be in order at year-end.

A budget is extremely effective in making sure a business has adequate cash flow — and, thus, in ensuring a business’s financial success. That’s why every business, from the smallest to the largest, should have a budget.

TIP: Each year-end, business owners should get together with their accountants and budget (project) revenues and expenses for the coming year. Amounts can be broken down to cover monthly or even weekly periods, depending on the business’s needs.

Once the budget has been made up, then monthly actual revenue amounts can be compared to monthly budgeted amounts. If actual revenues fall short of budgeted revenues, expenses must generally be cut.