Why Budgeting is Crucial
If you fail to plan, you plan to fail.
Anon
If you don’t know where you are going, then any place will do.
Anon
We should all be concerned about the future because we will have to spend the rest of our lives there.
Charles Kettering
Plans are worthless, but planning is everything.
Dwight Eisenhower
(he should know as he was in charge of the D-Day landings).
All wise sayings and truisms.
It therefore comes as no surprise that our most successful clients budget. They want to know where they are going, where they can get to and how they are going to get there. They control their future; they don’t leave their life to fate.
We use a specialised forecasting program which prepares four way forecasts:-
- Profit and Loss.
- Cash Flow.
- Balance Sheet.
- Funds Statement (where funds came from and where they went to.
This specialised software:-
- Allows us to provide budgets in fraction of the time it would take otherwise.
- Produces supporting schedules which further saves time when preparing submissions for banks and prospective business buyers.
- Is not prone to errors as Excel projections so often are.
Sceptics say you will never precisely predict the end cash balance or profit so why budget.
This opinion completely ignores the value of the process – of being forced to sit down and address the business and how it operates, what choices have to be made in context of time and money (rather than a series of vague and unconnected thoughts in the car and shower) and know when the bad times may arise, for how long and what consider actions may need to be taken.
If you would like to arrange an obligation free meeting to demo how we can help you, please click here.