How frequently do you review your business budget? Has it been gathering dust on your desk or buried in a drawer for months? For a budget to be effective, it needs to be reviewed and revised regularly – especially if your business is growing and you want to know what you can achieve in the future.
If your budget has been unread for a while, why not take a look and reassess how goals meet reality? Frustration can arise when your income and expenditure don’t match up. Perhaps expenses were judged as too low and revenue set as unrealistic. With regular, monthly reviews, your budget can be adjusted and reflect the true position of your business.
To keep on top of the review process, we suggest you:
- Schedule a review within the first 10 days of each month
- Find a review partner to keep you accountable
- Create a task list and delegate them to team members
- Fine tune the budget as tasks are completed and the picture becomes clearer
There is a clear correlation between a business that keeps an eye on budget progress and its success. With regular monitoring, if things aren’t going as expected, there is time to take the necessary steps to rectify the situation.
Warning signs
Let’s hope there are no nasty surprises in your budget review – but if there are, either operational plans don’t match expectations, or the budget wasn’t set accurately. It’s time to find out why.
Take action
Last minute spending restrictions are unlikely to get your budget back on track so it’s important to agree a course of action and assign responsibility to the appropriate team. Changes should be carefully considered, with the side effects thought through; a knee jerk reaction can do more harm than good.
Communicate progress
It’s great to share good news but it’s also important not to hold back on the less positive news. If there’s an overspend on the budget, resources can be directed to focus on increased sales or employees can be asked to share their ideas on how to reduce expenditure.
Key learnings
When your thorough budget review is done and actions are agreed, ensure you keep these points to hand for when you draft the next budget. Lessons learned will help the budget to be more accurate in future and allow your business to grow.
Review and evaluation of progress are two of the key steps in CRM’s 8 Steps Business Improvement Programme. The unique programme is a blend of our accounting and business advisory services, making your numbers work for you with trusted support from the team with many years of experience.
Find out more about our 8 Steps Business Improvement Programme online or give us a call on 01865 379272.
