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The importance of budgeting in business

tips for entrepreneurs

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You’ve probably heard of budgeting before, but do you actually have a budget for your organization?

Budgeting doesn’t have to be complicated. Watch this short video to get you started, simply.

If you prefer reading, you can find the transcription below the video.

budgeting in business

Good afternoon, everyone. It’s Irfanali with RMI Professional Corporation once again.

Hope everyone’s had a fantastic couple of weeks and is enjoying the summer heat that we’ve been having here, especially in Calgary.

As we are now in the month of August, what I really wanted to touch on today was a topic about budgeting in business.

cash flow forecast

Many people have December fiscal year ends and even if you have one that’s off the calendar year, budgeting becomes very important for many reasons the biggest of which is cash flow planning.

So, in many companies, big or small, you’re always gonna have cash flow requirements.

If you’re a bigger organization, you might be looking at some capital expenditures.

If you’re a smaller company, you might be just looking at when your peak cash flow time periods are so you can plan for those periods where you’re a bit slower and you need to actually have some savings to outlast that time period. 

Now would be the time that you want to start creating your budget.

fiscal year cash flow

simple budgeting

Do some planning for next year. What’s the easiest way to do that? Start with something!

Start with your last year’s numbers if you think you’re going to do the same thing and start building off of that.

Sometimes we’ll incorporate an increase in your expenses based on inflation or maybe you know you’re gonna take some sort of expansion and we can build and plan around that component.

Same thing on the revenue side. You need to have some components to base off of.

So typically we’ll start with what you did last year in terms of your numbers and now we can start to gauge and estimate what you’ll do for next year.

Once you can put that together, you’ll really start to see when you’re gonna be having some peak or slower periods. When you’re going to have the extra cash flow available, and when you’re gonna need to dip into your savings.

If you put that all together. It’ll give you as an owner of your business better decision-making power in order to plan better going forward.

ask professional accountants in calgary

Once again, thanks for tuning in. It’s Irfanali with RMI Professional Corporation. Take
care.

Do you need help with your budget? Book a Free consultation today or contact us at 403-457-4232 or by email at info@rmiassociates.com.

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