How to Make a Corporate Budget
According to Ducksters, budgeting is effective in reducing stress. By planning in advance, you get to reduce the possible financial problems in the future. To do this, you need an effective tool or document that will help you keep track of your finances. Below, we will help you create your own corporate budget:
1. Take into Account all the Revenue Streams
Get all the possible revenue streams so you can properly plan and craft your sample budget. Some of these revenue streams include your product sales, hourly earnings, and investment income. You may use a spreadsheet-based program for your financial budgeting, such as Microsoft Excel and Google Sheets.
2. Coordinate with Department Managers
Some of the revenue streams are handled by different department managers. Coordinate with them regarding the accurate number of the revenue streams and the deadline of the monthly or annual budget. Participate in meetings and inter-office gatherings also.
3. Split into Cost Types
There are two types of costs: fixed and variable costs. Fixed costs refer to the permanent amount of costs, such as salaries, insurance, utilities, etc. Variable costs, on the other hand, are non-permanent compared to fixed costs. These are expenses for raw materials, transportation, advertising, etc.
4. Set Up a Contingency Fund
There will be unexpected instances wherein you will have to dish out money because of unnecessary expenses. Consult with the Finance department about how much money should go into the contingency fund. Aside from securing your future, you're also avoiding unnecessary stress.
5. Set Goals on How You Can Increase Your Revenue
If you want to increase your printable budget as well as your contingency fund, set goals on how you can increase your revenue. One effective way of doing this is to increase the rates of your product prices. Again, communicate with department managers on how you can effectively increase your revenue.
Why the need for budgeting?
Proper budgeting serves as our "safety net" in the future, in case of emergencies or unforeseen circumstances. According to Budgeting Income, they are an important tool in planning and decision making. Aside from these, budgeting also helps track business performance.
What are the ideal programs for budgeting?
The ideal programs for budgeting are spreadsheet-based programs. These are Microsoft Excel and Google Docs. Take your time to familiarize the functions and formulas to make your budgeting easy and convenient. These two programs also offer templates, so feel free to use them out.
Are there advantages to budgeting?
Yes. Aside from allowing you to save for emergency costs, it also increases your financial literacy. You become more conscious of your spending habits, and you try to see the 'big picture,' wherein you anticipate the possible future events relating to money. After some logical budgeting, you'll be surprised to see how much money you have left and how much money you have been spending on unnecessary things.
Should I be rigid with my budgeting?
The answer is no. Circumstances change and so will your budgeting. What works today might not work in the future, so adjust your budgeting according to the situation at hand.