Use these three tips to effectively manage your company budget

Simangele Mzizi, Fsp Business, 07 Oct. 2014

Tags: budgeting, company budgets, budgets, how to effectively manage a company budget

You need to have a budget in place to manage your company’s finances.

Business reporter, Gene Siciliano, writes on, that while you can’t argue with the fact that a budget is the most effective way to achieve your profit goals, the assumption seems to be that once you have a budget, your work is done. It’s not.

Once you have your budget, you have to know how to use it or manage it properly.

Keep reading to discover three tips you can use to effectively manage your company budget so it achieves its objectives.

Effectively manage your company budget with these three tips

Tip #1: Be smart
You must consult your budget before you commit funds.
It seems a logical assumption: You have to know what you’ve budgeted to spend before you make a spending decision. But a lot of businesses don’t. Look first, then commit, says Siciliano.

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Tip #2: Be balanced
According to Siciliano, if you absolutely have to spend money for something that’s not in your budget, remove or postpone an equal amount of money elsewhere in your budget. This is called a trade-off. Spend a little more here, a little less there, and make things balance at the bottom. Very rarely do you have to spend every rand the way you originally planned.
Tip #3: Be frugal
If revenue doesn’t develop as you planned, under spend accordingly.
Siciliano says, in the end, your budget is about the bottom line. If revenue is less than you thought it would be, you probably don’t need to spend as much to support those non-existent revenue streams. So figure out what money was designated to support the revenue that didn’t come in and don’t spend that money.
There you have it: Having a budget in place doesn’t mean your work is done. You have to know how to manage it effectively. So use these tips to do just that.
PS: We strongly recommend you check out the Master Budget Series. It has everything you need to know about company budgets.

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