Now that we are at the equator of this accounting year, there are many companies that have begun to plan everything necessary for the preparation of the annual budget,one of the most effective tools when it comes to carrying good planning and maintaining financial control of your company.
In this way, the basic information is obtained to know the economic resources necessary for the achievement of the objectives set.
If you have your own company and you had not yet started with the relevant procedures, in this post by AYCE Laborytax we give you the keys to prepare the
annual budget of your company
Key points to make the annual budget of your business
Before you get down to work with the annual budget of your business, it is essential that you make an in-depth analysis of the
which will allow you to know the way in which income is generated,as well as all the expenses associated with the activity of the company itself,and the processes essential for the correct development of the business activity.
When performing the analysis of your business, it is important that you make a “forecast”, a study of the sales forecast of your company.
In fact we recommend that the forecast is the starting point when making the annual budget, taking as a reference the historical data of your company, the valuations of the work team, as well as any other indicator element that can help you estimate with the greatest accuracy, the possible sales figure.
Integration within the strategic plan
When preparing the annual budget, it must be included within the strategic plan of your company.
To do this, the different areas, sections or departments of the company will have to be integrated within the budget.
This way you will have a more exhaustive control that will help you evaluate the performance of each of the departments with a greater guarantee.
As the different areas are integrated into the annual budget, they will be forced to interact with each other, which will favor the internal communication of the company, and will facilitate the coordination of activities,as well as the detection of possible internal problems.
Adaptation of the company’s internal accounting plan
It is also advisable to adapt the internal accounting plan of the company
for its correct preparation and monitoring,since it is usual to identify in the same accounting account the different delegations, interspersed by a number that will allow us to recognize the different accounts that correspond to said delegation.
Use results-oriented metrics
Promote the metrics of your business oriented to the achievement of results. In this way, you will have a greater number of resources,which will facilitate the capital increase of your budget.
To avoid possible problems in the future, it is highly recommended that the budget has some flexibility.
This statement does not mean that they have to be modified at the first change, far from it, but greater flexibility will allow you to make adjustments without damaging all the work done so far, in case there were any significant changes that could affect the budget in a significant way.
If your budget is going to be based on the achievement of a series of objectives, it is highly recommended that you get involved to the maximum with the project,and therefore, also with the company.
In this way, you will have greater motivation and it will be easier for you to achieve the objectives set, also providing a higher value to your work.
Attention to macroeconomic data
It is essential that when preparing the annual budget of your company you take into account certain macroeconomic data.
In this way, it will be easier for you to increase your sales volume,in case the company’s target markets enter a recession, since you will have adjusted the expense structure of your company in the right way.
In the same way, you will have to define a marked control and action plan on possible deviations since, otherwise, the realization of the annual budgets would be useless.
The realization of the
annual budget of the company
will allow you to make decisions that will help you achieve the objectives set.
It is much more than a simple working document, since it will act as an effective means of control to be able to contrast all kinds of data that affect the capital of your business.
In short, having an annual budget will facilitate the management of your business, providing you with all the data you need to achieve success.
If you want to learn more about how to prepare your company’s budget, our
accounting and labor advisors
will offer you all the information you need.