If your business is anything like most small businesses I know, budgeting is one of those things that you are committed to doing, but time has a different plan.
You now you need to be creating a budget that matches your business’ strategic plans and ongoing operation, however amidst running your business, time just doesn’t always allow the proactive budgeting process to take place.
So in the end you wind up with either a last minute budget tossed together the 3rd week of January, (or often later) or perhaps worse no budget at all.
Either way, with so many important decisions ahead, having no budgetary guidance is risky to say the least.
The Purpose of a Well Thought out Budget
Budgeting for small business has grown a bit of a reputation.
Let’s just say it has become known to be “Aggressive” at times. Some may even call it a PipeDream.
The problem is that business owners tend to be very proud of their businesses and therefore they believe that they can make tremendous strides in a very short period of time.
While this most certainly can happen, it is more the exception than the norm, and with growth expectations that are too far overstated it can make the budgeting process into a complete waste of time.
That is why a well thought out budget is so important.
Taking into consideration current trends, new projects, strategic initiatives and the changing regulatory environment, a budget can serve as the roadmap for a business that is attempting to meet its profit goals, its cash flow goals and its continued overall growth goals.
An (Inside) Outsider’s Perspective
Do you want to know why so many budgets miss the mark?
Beyond the proud owners who aspire to see greatness in short order, the real reason so many budgets miss the mark is because they aren’t given proper attention, AND the creators are often too close to the situation.
While it may seem being close to the situation would serve as a great benefit for the budgeting process, many times a good budget needs some outsider perspective.
That is why your CPA can be a great resource during the budget planning process.
Your CPA will tend to know quite a bit about your business, (Depending on the relationship) but they will also be far enough removed that they can ask the questions that you may be forgetting to ask.
For instance, have you accounted for the rising cost of health care in your new budget?
Are you prepared for the cash requirements during month 6 when you hire those 4 new employees?
Sometimes an eye that hasn’t been looking at the plans and the numbers every day can provide some terrific input into the budget process pointing out details that would really hurt if missed.
Another important consideration is the wide area of expertise that the CPA can bring. Given the exposure to so many types of businesses and their needs, the experience can be leveraged in helping your business plan better.
If your strategic plan is your roadmap, then your budget serves as the compass.
When to get our CPA Involved in the Budget
Realistically the budget process can take from a few days to a few weeks depending on the size of your business and the detail in which you plan to go into.
If you are looking for the benefits that come with involving your CPA then you should try to get them involved as early as possible.
Engaging them in the middle will make it more difficult for them to help, whereas early involvement will provide more clarity on the goals of the process.
But no matter what point you involve your CPA, you will benefit from their expertise.
Here is a bonus reason to get your CPA involved; we can help hold you accountable to a timely completion of the budget process.
Better Budget, Better Results
It is easy to put off budgeting. It takes time, it takes resources and it doesn’t immediately feel like it shows a return.
I’d like to share something I have learned from working with many great businesses…
The best businesses I work with all take the budgeting process seriously.
If what I said above is true about the budget serving as the “Strategic Compass,” then knowing which way is north will help your business achieve more of your strategic plan.
And if you need a little help getting started, don’t be afraid to ask.
Disclaimer: The information contained in this Blog (the “Blog”) is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. In no event will BRP, or its partners, employees or agents, be liable to you or anyone else for any decision made or action taken in reliance on the information in this Blog or for any consequential, special or similar damages, even if advised of the possibility of such damages.