This year has been a year of new life directions and changing habits. Although, this year has been hard in countless ways, it has also given people the opportunity to try and launch their start-ups and passion projects that have been in the limbo for years.
To start 2021 off right we want to help start-ups ensure their budgeting is on track with this handy guide.
What’s The Goal?
We know budgeting can be time-consuming and confusing, but there is a reason why it’s so important.
- What’s your goal?’ How can you plan for the future without knowing where you want to go? Budgeting will give you the motivation you need to identify indicators of business growth and where it can be supported.
- Money, money, money! When you think of budgeting the word money generally goes with it hand in hand. Checking in on where your money is heading will not only show you what is being spent but where and how it’s being spent.
- Areas of action. Having a clear understanding of where your funds being allocated will allow you to make knowledge-based decisions on several variables that may arise.
How to Get Your Right Numbers
So now that you’re ready to budget, where do you source your numbers from?
Using Your Financial Statements
- Balance Sheet: The best way to understand the state of your business at a specific point in time. Balance Sheets provide you with a clear understanding of the assets you own as well as the liabilities you owe.
- Profit and Loss: A great place to start with to understand how much incoming and outgoing money you have spent during a certain period of time. Profit and loss statements allow you to understand your business trends and patterns.
- Cash Flow Statement: A cash flow statement is a helpful place to track money spent and received to analyse business patterns.
- Best guess: We know a budget can be a little dicey but having well-prepared documents (see financial statements above) will give you access to historical data giving you more accuracy.
- What’s your trend? Trend data can advise you on what changes you could make in the future and how they could impact your business. This will allow you to make more informed business decisions.
When To Get Help
We know that budgeting can be tough, especially when you have a million other things to focus on. Getting help from experts in the field will not only allow your budget to become more effective but also get done faster meaning your financial information is always easily accessible.
Not sure how to get started? Check out how Cotchy can provide your business with accurate books every month.