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| Budgeting+Bookkeeping+Business Plan = Success |
By:
Veronica |
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As a kid, I always hated math, but as I got older, I realized that math was everywhere. Since I grew up as a teacher’s kid, I was going to learn to like math whether I liked it or not. So, here goes nothing, THANKS MOM!
Now that we have that out of the way,I want to introduce you to a 3 pronged approach to success, budgeting, bookkeeping and business planning.
Budgeting
A budget is a financial planning tool that alleviates the guesswork when planning future business activities. It’s developed by using solid figures from past performance and pairing them with future goals to formulate a parameter for business spending. Okay, now in plain English…it tells you what you can and cannot do with your business from a financial standpoint. It’s a great tool for monitoring your spending and growing your business. Start by sitting down with your accountant and analyze your businesses financial status. Gather the final figures and decide on a reasonable growth percentage for a reasonable period. Once this is complete, determine your average annual expenditures and estimate what they will be for the established period. Now consider your growth factors. These are the things necessary for growth. Figure the costs and combine the totals with the other financial figures. This will give you a rough picture of what you have at your disposal. It will also help determine whether the time is right for growth. Before you attempt to implement a budget, always consult your accountant --- remember, they do this for a living.
Bookkeeping
Most small business owner decide to outsource their major accounting needs, but few find it financially beneficial to outsource routine bookkeeping duties. In small business, the routine bookkeeping duties are often delegated to trusted office personnel that are good with numbers. Well, the days of trusting your daily financials to the office secretary are gone. The digital age is here! Computer networking and financial software packages make the task of bookkeeping a snap. Now Betty, the office secretary, can input the financials and you can monitor them in real-time or at your leisure. It’s vital that you maintain a clear understanding of your company’s financial status. Proper bookkeeping is important for sustaining and growing your business. The major areas of interest when maintaining solid bookkeeping records are:
· Revenue & expense
· Cash expenditures
· Inventory records
· Accounts receivables
· Accounts payable
· Employee Records
Keep in mind the two major reasons for good bookkeeping are financial knowledge of your business and the IRS. With the understanding, that both of them can and will shut you down.
Business Plan
Your business plan relies heavily on your budget and bookkeeping records, because they help determine the direction that your business should be going. The primary goal of the business plan is to layout a road map of your business. Ultimately, this is your company’s resume and it details the business outlook, the management team, marketing and sales status & goals, product/service offerings, and the overall financial snapshot of the organization. The business plan must be viewed and developed as a decisive tool that demonstrates where your company has been, its current state, and its direction for the future.
Putting it all together
The success of your business is not totally reliant on your business offering. It’s hinged on the strength of B3. As a small business owner, your ultimate goal should be to grow your business and fulfill your dream, and we have provided you with a proven template for success. Evaluate the financial consequence of every business decision by utilizing a well-developed budget, solid bookkeeping tactics, and a pristine business plan to formulate your success.
Submitted by VBP OutSourcing, Inc., a maryland based full service bookkeeping firm that specializes in Quickbooks and Peachtree accounting systems. For more information, please visit VBP at www.vbpoutsourcing.com |
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