Smart Budget Planning
- January 22, 2016
- Posted by: sheoran.shivam
- Category: Business plans, Uncategorized
The foundation of a comprehensive company budget is historical data from past budgets. By comparing past budget numbers with actual performance you can see how effective previous budgets have been and adjust your current numbers accordingly. For example, if your budget number for office supplies was consistently below the actual amount spent for the previous three years, then you know that you need to raise that amount for the current year or implement new office supplies spending policies.
A key element in a company budget is the revenue for the coming year based on sales projections. Work closely with the sales department to monitor sales projections and create a number that is as accurate is possible. Projections will not be exact, but overly optimistic sales projections can lead to budget shortages as the year goes on.
- Growth through innovation/creativity:
Rather than be constrained by ideas for new products, services and new markets coming from just a few people, a Thinking Corporation can tap into the employees.
- Increased profits:
The corporation will experience an increase in profits due to savings in operating costs as well as sales from new products, services and ventures.
- Higher business values:
The link between profits and business value means that the moment a corporation creates a new sustainable level of profit, the business value is adjusted accordingly.
- Lower staff turnover:
This, combined with the culture that must exist for innovation and creativity to flourish, means that new employees will be attracted to the organization.