Ask our Virtual CFO About The Best Financial Tools for Your Business
Posted by Adam Hale on Tue, Jan 24, 2012 @ 05:00 AM
What would you say if you were told there was a tool that could help you create a crystal-clear business plan? What about a plan that provided you with continual feedback on how well your plan was working. A plan that told you exactly what's working and what isn't, allowing you to consistently make smart business decisions to keep your business on track for success, wouldn’t you want to take advantage of it?
Well, there is such a tool. It's called the Budget vs. Actual report.
Clarifying Your Plan
Clarity is power: The clearer you are with your business goals, the more likely you are to achieve them.
Creating a budget: Having a budget forces you to drill down in to the details of your goals. It prods you to think about how one business decision affects all other aspects of the company's operations.
For example; let’s say you want to grow your sales by 15% this year. Does that mean you need to hire another salesperson? When will the business start to see new sales from this person? Do you need to set up an office for them? New phone line? Buy them a computer? Do you need to do more advertising? How much more will you spend? When will you see the return on your advertising expenditure?
A budget is really a planning tool that makes you clarify your dreams. And planning is the first step in realizing your dreams .
Navigating the Ship
Once you've clarified your goals, you start making business decisions to help you reach your 
desired outcome. Some of those decisions will give you better than expected results. And some decisions will give you poor results.
This is where the Budget vs Actual will really make a difference. When you compare your budgeted sales and expenses to your actual results, you see exactly how far you are off your plan. Sometimes you need to adjust your plan or budget and sometimes you need to focus more attention to the areas of your business that are not performing as well as you planned. Having a clear goal and making adjustments where they are needed helps you reach your destination.
Just Do It
We often know what we need to do but don't take the necessary action.
It may seem like a huge hassle to create a budget and then create a Budget vs. Actual report every month. But as with any new skill, although it's hard at first, it does get easier.
For assistance in creating a Budget vs. Actual report for your business contact our financial advisors at (260) 497-9761 We are happy to assist you with all your financial needs.
