When is it too late to start a budget? Some business owners don’t use a budget, and as a result, aren’t sure where money is being spent. Maybe you created some projections at the beginning of the year but are missing the mark on the sales side. Even though half the year is over, you can gain some valuable insights by assessing your first-half actual results to create a new budget.
Here’s How:
- Download your first six months of P&L results into excel.
- Identify the top three to five expenses that may be different in the last half of the year.
- In the last column, note the percent you estimate each expense item to change (increase or decrease).
- Calculate your second-half anticipated expenses using those percentages. Then you can copy and paste the other expenses that are expected to stay the same.
- Estimate your anticipated second-half revenue.
- Calculate the estimated profit & loss for the remainder of the year (you can also break this down by month if it helps).
- Review and adjust your expenses that don’t move directly with income. For example, maybe you will add or eliminate an employee or award bonuses.
- Enter your budget by month into Quickbooks so that you can run comparisons of Actual to Budget.
Look at that! You just created a quick and easy mid-year budget. What did you identify? Did some costs go up or down unexpectedly? Can you create any efficiencies? Budgeting can help you stay more in tune with your business’s twists and turns so you are more prepared when making valuable decisions.
Still not clear on how your year might end up financially? If you need help identifying areas of opportunity, we can help with your budget and help Make YOU more profitable! You can contact me with your questions at kathy@budgetease.biz.
