Ask the Advisor – Budgeting in Today’s Uncertain Environment
Question: In today’s uncertain environment, what should I prioritize within my accounting function? Answer: Proactively managing your accounting and financial function can be a complex task with the nature of today’s business environment. During these challenging times is when we more frequently work with our small business clients to create a budgeting plan, which can help them quickly scale up or down, as needed. Below are some key benefits of a budgeting plan to help businesses better navigate uncertain times:
- Planning. Budget planning will help you anticipate your cash flow and expenses, which in effect, enables you to make more informed decisions about how to allocate resources.
- Managing. Business owners are then able to create guardrails to stay within their business’s means. Budgeting helps identify where to cut costs and invest more money to grow your top and bottom lines.
- Prioritizing. This ensures that your most important business expenses are covered first, plus it will help you refrain from overspending on non-essential items.
- Monitoring. Through proper budgeting, you are better able to compare actual results to your budgeted amounts. You will see where you spent more or less than anticipated, review unexpected shortfalls, if any, and more.
- Funding. In most cases, banks look positively at businesses with budgets in place. This also better supports your business plan and how it will generate a return on investment.
The most important thing to consider in uncertain times is the allocation of time and money, and a budgeting plan is a valuable tool to help you manage both. Doeren Mayhew’s Business Advisory Group works closely with small businesses to offer accounting support, help them improve their overall budget management and more. If you’re in need of assistance, contact us today.