Happy new year!
2020 was like travel in a dark tunnel, full of fear and uncertainty.
Hope everyone has a good start in 2021, leave the fear behind, moving forward better and stronger.
New year, new start, new plan.
It is time to set a budget for 2021; project a healthy growth and monitor the spending for a better and profitable year.
Budget?
Yes, the budget.
Although most SOHO and smaller businesses seldom use a budget, it is good to monitor the expenditures during this uncertain period.
How to set a budget?
Consider using the average of your past few years actual (maybe past two to three years) if you do not know how to set a budget.
MoneyWorks
MoneyWorks support two alternative budget, A and B, for each financial year. You can enter directly into the budget editor, import, or paste from a spreadsheet. From the Show menu, select budgets to launch the budget editor.
The budget editor is like a spreadsheet, rows of account and period in columns. Scroll down to the Profit and Loss account if you intend to prepare a budget for revenue and expenses. The sub-ledger, separated by a ‘~’, form part of the account list if you are using the departmental account.
Enter the monthly average of each account and copy across the periods. Save the budget, that’s it!
Monthly, you can view the progress by printing a Committed Budget report, compare the actual against budget.
QuickBooks Online
QuickBooks Online has an easy-to-use budgeting tool for SOHO and small businesses. It allows budget for the entire year, or budget for a specific project, class, or location.
Click the Gear icon (setting) and select budgeting. Then, click the Add Budget button from the budget list to add a new budget.
Enter the budget name, set the interval and continue with the budget value.
Use the QBO built-in Budget vs Actual report to monitor the actual performance against the budgeted value.
Plan it; monitor the spending, watch out the bottom line while you are busy with day-to-day.
Stay safe and healthy.