A good budget is a necessity in a good business plan. It is one of the best business tools we have, allowing us to set financial targets and measure our performance.
In addition to goal setting value, budgets will often improve your chances of acquiring funding as financiers often require forecasts as a prerequisite for funding approval. Cash flow forecasting is a vital part of ensuring your business will always have the cash it needs, because profits don’t pay bills – cash does.
If you take into account your ‘known’ costs and your expected costs, you can determine what your sales need to be and how much cash will be generated by your business.
This will allow you to plan your income and expenditure into the future.
We recommend Spotlight Forecasting which takes your data directly from Xero to create an up to date 3 way (Profit Budget, cashflow forecast and project balance sheet) forecast to enable you to make decisions now to ensure the right result in the future.