According to Willpower by Roy F. Baumeister and John Tierney, you strengthen your willpower muscle when you keep track. For example, when you write down the food you eat your calorie intake will decrease.
Creating a budget for a small business is a great way to keep track of how you are performing compared to your expectations. An informative budget for your business should take less than an hour to prepare, minutes to review monthly, and will provide you with loads of information you need to monitor your business.
Preparing the Budget
Prepare your budget using prior information you already have in QuickBooks. (Alt CGS) You only need to decide if you want to use prior year actuals or monthly averages for comparison. Within seconds QuickBooks software generates a basic budget for you to adjust for sales growth and expense reductions that you expect this year. When you are done with the adjustments, save your budget and it will be there when you do your monthly reviews.
After all your monthly activity, pull up a report that compares your P&L to your budget by clicking Alt-RUA. Customize your report by month or YTD. Take a couple minutes to see where you are hitting your targets and where you may need to make adjustments.
Your budget will improve your willpower to make better and more profitable decisions for your company.
BudgetEase can help you with your small business bookkeeping needs, for more information about your budgeting or any other bookkeeping needs, contact us here.