Now is the perfect time to start thinking about your budget for 2023. ZümiFi highly recommends taking advantage of the budgeting feature offered in QuickBooks Online Plus. Whether you are creating a budget for the first time or if you need to adjust your budget, we have a few tips that can help you get started in the right direction.
- Fixed Expenses: Start with your youfixedet monthly expenses and enter items like rent, monthly software subscriptions, phonexpensesse, etc. Since these will be consistent throughout the ye, they should be easy to estimate.
- Variable Expenses: Create a list of items that will fall into this category. Items like insurance premiums or fees for your CPA may be paid annually or irregularly, so be sure you capture them appropriately. Review your billing history for 2022 and perhaps even 2021 to get an idea of where you would like to set your budget for your variable expenses. You should also include unexpected expenses like repair, maintenance, use, and new computers in your budget.
- Revenue: Income is often the trickiest projection, especially for growing businesses. As a guideline, we recommend reviewing monthly revenues from 2022 and perhaps even from prior years. Be realistic with your numbers; you don’t want to overestimate especially if you are a new business. Be somewhat conservative with these numbers and consider the type of services and products you sell and whether you anticipate any additions or changes in the coming year.
Once you have your numbers entered, we recommend that t pull up your Budget and the s Actual report monthly. But, doo is not let all that work go to waste! The Budget .vs Actual report is a great tool that will help you track your income and expenses and further help you understand where you were on target and where you were off target in your assumptions. Understanding the relationship between expenses and revenues in your business is key to knowing how to control them and leverage those relationships to your best advantage. Of course, you don’t have to be perfect and will never be 100% correct. So don’t hesitate – jump in, give it your best sh, too, and you can always learn as you work with this reporting regularly and fine-tune it going forward.
Of course, if you need assistance,e you can always reach out to our team at ZümiFi…
We are always here to help!