Save for a rainy day
“I bought this racy-looking dress,” Yoko Said. “I have nowhere to wear it.”
Frugal, ever practical Kathryn said, “Then why did you buy it? How much was it? What color?”
“In case. I’m not telling you how much it was because you’ll say I should have put the money in the bank for a rainy day. I never go anywhere on rainy days. The dress will get ruined in the rain because it’ silk. It’s sky blue.”
Kathryn grinned. “Forget it. We have a language problem here. You wouldn’t wear the dress on a rainy day because you wouldn’t have bought the dress. Instead of buying the dress you would have put the money in the bank.”
The above was from Fern Michaels’ book ‘Lethal Justice’. I found it quite entertaining.
Save for a rainy day.
For small businesses, save for a rainy day is much more important comparing to a bigger enterprise. Due to limited resource, it is difficult for small business to apply for a loan from the Bank; so, saving from your own business reserve is become a necessity.
To achieve your goal in saving, you have to manage your finance in a more systematical way. Financial management is not just about cutting down your expenses. It is about putting your financial resources in a better control. You may consider creating a budget at the beginning of your fiscal year and work along with your budget. Then, comparing your budgeted report with your actual accounting data and base on the differences between the two reports and manage your finance accordingly.
Many small business owners do not prepare budget, partly they are busy with their day-to-day task or some may not even know how to create a budget.
QuickBooks accounting software is a ‘small business friendly’ solution that provides a budgeting tool that helps small businesses create a simple budget base on either Profit & Loss or Balance Sheet accounts. You have an option to either create your budget from scratch or base on your previous year actual accounting data.
To create a budget in QuickBooks simply go to Company menu, select Planning & Budgeting and follow by Set Up Budgets. Then, follow the wizard creating your budget for your business. After creating your budget, you can start comparing your budgeted figure against your actual data from the Budget vs. Actual report.
With a budget, you can better allocate your financial resource and grow your small business. Join my class to have a better understanding on how QuickBooks budgeting tool can helps you grow your small business.