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So you’ve built your budget. Now what?
Are you going to just file it and forget about it? Please, please, please, don’t do that.
Hi, this is Judi Otton with GrowthCast, and let’s talk about how to use your budget once it’s built. You put a lot of effort into it. It would be a shame not to gain any of the benefits that you can get from tracking your budget.
So the first thing I want to talk about is how you track. Ideally, you’re measuring budget versus actuals each month and adjusting from there. If any of you have been in corporate like I have and a budget was used as a tool to hold you to this spending or discipline you if you went over spending, we have to let go of those feelings, because as a business owner, a budget is a very useful tool. So tracking budget versus actuals is ideally done through your accounting system. If you use QuickBooks, either online or desktop, it’s very easy to add one or even multiple budgets. And then every month when you review your monthly reports, review your budget versus actuals. See where you are, see how you’re doing. If you don’t have an accounting system that supports it, the template that I’ve been offering here has a budget versus actuals tab, and all you need to do is put in your actual numbers for each month and the tab for budget versus actuals will magically compare your budget versus actuals.
As you’re monitoring every month, you may find that things are more expensive than you expected or you’re performing better than you expected. Adjust it. This isn’t set in stone. You can adjust it as you go through the year.
Finally, as you go through the year and business decisions come up. Can I hire this person? Can I take advantage of this new opportunity? Do I need to be careful about my spending? This is where the budget magic really happens. You use your budget and your budget versus actuals to make great business decisions to keep your business healthy throughout the year. If you have any questions, feel free to reach out. Here’s the playlist with all the other budget videos and I’ll be back next week with a new Fiscal Fitness Tip of the Week.