June quarter is when many entities create a budget by estimating business income and expenses for the next financial year. Ideally, the budget is then used to compare the actual business performance with forecasted financial figures, however, this rarely happens. Unfortunately, the budget gets filed away along with other paperwork and business owners discount the benefits of reviewing their figures quarterly. A budget is a vital tool for your business’ survival and growth.
Reviewing your quarterly figures against the budget and subsequently creating a rolling forecast with your accountant will provide new insights into your business operations. There are certain key drivers and measurements which need to be assessed on quarterly basis and the advisers from Tradies Accountant will explain these to you in a simple-to-understand manner.
Through quarterly reviews of your budgeted and actual data, you will achieve the following:
Manage your cashflow: you will gain control over your income and expenses and understand the cashflow of your business. Maximising the amount of cash available within the business will help with business growth and development. Certain cash maximisation techniques will be looked at and implemented with the help of your adviser. You will finally understand why you’ve made $300K in sales for the quarter and have no money to show for it in your business bank account.
Growth planning: strategies will be put in place to facilitate business expansion. These strategies need to be achievable and advisers from Tradies Accountant will work with you on strategies that will suit your business. The growth rate for your business should be sustainable and each quarter it should be justified in actual and forecasted figures – for example, if 10% increase in sales is expected for the next quarter, can the business afford extra wages? Will the business meet its creditor due dates?
Benchmarking: every industry has its own benchmarks. Comparing your business to industry averages will help you establish if you’re paying too much for your materials or if you’re not charging your clients enough. Preparing a business budget with an accountant who deals with clients in the same industry means that your expenses can be compared to similar business ventures.
Outside drivers behind performance: outside influences such as economic conditions, latest Government laws and your industry trends impact your business performance. Anticipating changes and proactively reacting to these influences will ensure your business stays ahead in your industry.
Developing a trusting bond with your adviser will ensure your adviser is there to guide you through the highs and lows of your business cycle. If you would like to achieve a healthy profit from your business while maintaining a sustainably growing business, contact us to book a budget appointment.
Tradies Accountant Pty Ltd
(07) 3174 5010