When we have a company under our responsibility, we feel enthusiastic about being able to design projects, develop products, manage people and lead teams. But budget management, one of the company's most complicated administrative parts, easily goes out of our control with any oversight or expense that was not in the plans.
Why control: Managing your company's money rightly ensures the success of all your projects, because that way you find a balance between what can be invested in the development of new products and services, for example, and what needs to be separated for routine spending. Remember that it is precisely the lack of financial control that drives many small Brazilian companies to close their doors. Do not let this happen to your business. Start planning your budget right now!
How to begin: Although it seems difficult, controlling the company's expenses without affecting the personnel is easier than you might think. There are various techniques and management tools that will help you to have money to apply in the venture and still have money for you, manager. See the four steps.
Step 1: Break the Expense Target
Gather an amount of company money and others for personal expenses. The ideal is to have more than one bank account for this. That way you know what the limit of use of money is without compromising the finances of the company and vice versa. Likewise, the budget for each area of the company also needs to be different. Reflect on how much it needs to be aimed at marketing, salaries, pro-labore, training and benefits (HR), in addition to operating expenses, direct and non-operational.
Step 2: Be disciplined and check the accounts carefully
Write down everything that comes in and out of money. Set aside one day to check all your business expenses. See and review all transactions, review spending on a monthly basis to see if it's going beyond your account. If you are spending too much, you should cut some expenses so as not to jeopardize the organization's development.
3 Step: Use a worksheet to make a budget
Although it sounds tiresome to write every transaction on paper or on the computer, it makes a difference to know if money is actually being applied in the right place. Some tools, such as a Full Financial Control, can help analyze the data and provide great support for finance.
Open a blank version of the worksheet and start by simulating your expected expenses and income for each of the future months.
After you simulate each month, posting all projected expenses and revenues go to the Consolidated Results tab and see the result of your planning, as in the example below.
In addition to the above analysis, you can see the result of your budget planning by DRE, cost center and by bank account. In addition it is clear to analyze the graphs.
Cash Flow by Cost Center:
Financial Dashboard to keep up with the whole year:
4 Step: Reevaluate the Budget
This is the key to success for your company's finances. There are always new demands or the volume of work increases or decreases. It is important to always keep track of the money that comes in and out of your company on a regular basis so you do not get caught up. So once you've completed the previous fill, save this worksheet so you always have your detailed financial projection.
Then open a new blank worksheet, copy the result displayed in the DRE of the projection worksheet, and mount on the Financial Planning tab of the Complete Financial Control Worksheet.
Then, as you make the actual postings (not the ones previously projected) throughout the year, you'll be able to keep track of whether you're tapping your revenue and expenditure goals or not, making a comparison between what was planned earlier in the year and what was being carried out throughout the year.
When you follow the budget through the worksheet, according to step 3, you can at the end of the month have charts with an illustrated view of the actual situation of that period.
So in any positive difference between the planned and the realized you must rework the budget so that it can accommodate you to the volume of expenses and what you want to profit on top of the total sum. Over time, you begin to accumulate a true picture of the financial health of the company.
Is it clear how important it is to keep track of the budget for the company's finances? At LUZ, we offer a model of worksheet ready to prepare the budget which can make this job even easier! We also have a Spreadsheet Ready for Complete Financial Control!