When you are operating a small business, having an accurate annual budget is essential. Your budget lets you know how much money you expect to bring in and what expenses you need to pay so you can make the best decisions for your company's future. However, not all budgets are equally effective. For small businesses, the best way to create an accurate budget is often through the use of a template.
What Is a Budget Template?
A template is a pattern that tells you how to create your budget. Most budget templates include different categories you can fill in based on your business's specific needs, goals, and circumstances. Different budget templates may be available for your use. However, the best annual budget templates for small businesses usually include the following entries:
- Different sources of revenue - Any accurate small business budget will incorporate all of the different sources of revenue your business maintains. Each source of revenue should be listed separately, along with the estimated amount you can expect to receive from that source during the year.
- Various expenses - Your small business budget should also include all of the expenses you expect to pay during the year. Like your sources of revenue, expenses should be listed separately so you can see exactly where your money is going. Examples of expenses you may include are payroll, office supplies, rent, utilities, inventory purchases, professional services, transportation and marketing.
- Important bottom-line calculations - After inputting all of your revenue and expenses, you can also calculate important amounts that help you understand your current financial position and make decisions for the future. Examples include total revenue, operating revenue, non-operating revenue, total expenses and profit. It may also be beneficial to break your annual budget down by month, so you have a better picture of what to expect throughout the year.
Developing a Budget Template
When developing a budget for your small business, you can either choose an existing budget template and customize it, or you can create your own annual budget template that you will use year after year. Although many of these templates are similar, it is important to compare your options carefully to find a template that works well for your needs. Most templates will need to be altered based on your business's specific streams of revenue, expenses and long-term financial goals.
Creating and managing your own budget can be overwhelming, especially if you don't have much experience in this area. If you are uncomfortable creating your own budget, or if you simply don't have the time or the resources to manage your company's budget in-house, it may be in your best interest to outsource budgeting and other important accounting tasks. To learn more about outsourcing or for more small business tips, please contact Padgett Business Services today.
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