Budgeting & Forecasting

Budgeting & Forecasting

BUDGETING AND FORECASTING FOR SMALL BUSINESSES

Budgeting and forecasting can mean the difference between long-term success and imminent disaster for a business. Planning for the future and anticipating any potential issues is vital to ensure that if anything unexpected does happen, your company is as prepared as possible to face it.

Not all small businesses can afford a dedicated in-house team to deal with financial planning, and that’s where we come in. At RLTP, we offer budgeting and forecasting services to help businesses in Derby and throughout the UK to plan ahead with confidence.

WHY ARE BUDGETING AND FORECASTING IMPORTANT?

Put simply, budgeting and forecasting enable you to manage your money more effectively. Business performance can be monitored more accurately to give a clear picture of your financial position. This means you can make data-backed decisions to reach your business targets and prepare for any unexpected problems.

WHAT IS THE DIFFERENCE BETWEEN BUDGETING AND FORECASTING?

Budgeting is the process of predicting the growth and expenditure of your business over a set period of time – usually a year. This is achieved by setting aside enough money for every goal and requirement of the business. A budget is representative of a company’s financial position, cash flow, and goals, so reviewing annual budgets is a great way to show year-on-year growth.

A financial forecast, on the other hand, shows whether you are on target to meet your goals by analysing the business’s financial reports. Forecasts show expected outcomes based on the company’s historical data, so budgeting will always be the first part of this planning process. Forecasting will be a critical resource in your business plan and help to identify any potential problems so that preventative measures can be developed accordingly.

A cash flow forecast can help you plan income and expenditure for the year and provide an understanding of when and how much money will be in your account so that you can allocate it accordingly.

HOW DO YOU PREPARE BUDGETS AND FORECASTS?

Planning is key to effective budgeting and forecasting. First, assumptions must be defined and any concerns should be raised by analysing statistical data from both the business and the surrounding sector. Next, key goals are set and reporting metrics are implemented. Using forecasting, decisions can be made to work towards a financially sustainable plan of action.

RLTP can help you to set up a budget, cash flow, and financial forecast for your business. We are a team of expert accountants and bookkeepers on-hand to ease you through the entire budgeting process and to walk you through using current forecasts to monitor and control your spending. Get in touch today to discuss how we can help you plan efficiently for the continual success of your business.